Maintain a "buy" rating on China Longyuan Power Group Corporation (00916) with asset injection to fuel installed capacity growth.

Tianfeng released a research report stating that it maintains a "buy" rating for China Longyuan Power Group Corporation (00916), with an estimated net profit attributable to shareholders of 6.6 billion, 7.5 billion, and 8.2 billion yuan from 2024 to 2026. The company released its third-quarter performance for 2024. In the first three quarters, the company achieved a revenue of 26.35 billion yuan, a year-on-year decrease of 6.37%; and a net profit attributable to shareholders of 5.668 billion yuan, a year-on-year decrease of 11.38%. Key points from Tianfeng: The transfer of equity in Jiangyin Sulon has been completed, with a year-on-year increase of 2.4% in electricity generation in the first three quarters. The company has completed the transfer of equity in Jiangyin Sulon Cogeneration Co., Ltd., reducing its controlling installed capacity by 1.24GW, including 1.22GW of thermal power and 0.03GW of solar power. In addition to new units that have come online, as of the end of September, the company's controlling installed capacity totals 37.01GW, including 28.38GW of wind power, 0.66GW of thermal power, and 7.97GW of other renewable sources such as solar power. In terms of operations, wind utilization hours decreased by 108 hours year-on-year to 1607 hours in the first three quarters, with wind power generation totaling 43.9 billion kWh, a slight decrease of 1.82% year-on-year; and other renewable energy generation (such as solar) totaling 5.8 billion kWh, a significant increase of 82.76% year-on-year. With the addition of new units coming online and the increase in profits from equity disposal, net profit attributable to shareholders in Q3 increased by 30% year-on-year. On the income side, the company achieved a revenue of 26.35 billion yuan in the first three quarters, a decrease of 6.37% year-on-year. Within this, the wind power segment was 19.116 billion yuan, a decrease of 8.35% year-on-year, the thermal power segment was 5.439 billion yuan, a decrease of 12.48% year-on-year; the solar power segment was 1.568 billion yuan, an increase of 65.51% year-on-year; and the other segment was 2.27 billion yuan, an increase of 83.84% year-on-year. In addition, the income from the equity disposal of Jiangyin Sulon has been included in the net other income, expected to contribute 514 million yuan in pre-tax income. On the cost side, operating expenses in the first three quarters decreased by 1.51% year-on-year to 17.605 billion yuan. Overall, the company achieved a net profit attributable to shareholders of 56.68 billion yuan in the first three quarters, a decrease of 11.38% year-on-year; with a net profit attributable to shareholders of 16.47 billion yuan in Q3, an increase of 29.89% year-on-year, possibly due to the comprehensive impact of new units and equity disposal income. The group plans to inject 4GW of new energy assets, with the first batch being around 2GW. In order to implement the "Supplementary Commitment Letter of State Energy Investment Group Co., Ltd. on Avoiding Competing with China Longyuan Power Group Corporation in the Same Industry," State Energy Group intends to inject equity of new energy companies within certain provincial subsidiaries that meet the injection conditions under them, with an estimated new energy installed capacity of about 4 million kilowatts, initially planned to be injected in batches. The company recently announced its intention to acquire the equity of 8 new energy companies held by State Energy Group's wholly-owned subsidiaries, State Energy Asset Management Company, State Energy Gansu Power, and State Energy Guangxi Power, totaling 2.0329 million kilowatts in operation and under construction, including 1.4469 million kilowatts in operation and 0.5860 million kilowatts under construction; with 1.3160 million kilowatts of wind power capacity and 0.7169 million kilowatts of solar power capacity. Risk warning: Risks of a significant downturn in the macroeconomy; risks of a decrease in electricity prices; risks of policy execution falling short of expectations; risks of overly intense industry competition; risks of persistent delays in subsidies; risks of company development projects not meeting expectations; uncertainties in asset injections, etc.