Guotai Haitong: Maintains "buy" rating on DATANG RENEW (01798) with a target price of HK$1.95.

Guotai Haitong released a research report stating that it maintains a "buy" rating for DATANG RENEW (01798) with a target price of 1.95 Hong Kong dollars. The bank predicts the company's EPS for 2026-2028 to be 0.1/0.1/0.1 yuan, with the company's current market value corresponding to a PE of 10.4 times in 2026, a PB (MRQ) of 0.39 times. With a lower valuation advantage in PB compared to peers with a PB (MRQ) of 0.62 times, the company is given a PB of 0.6 times, with an exchange rate of 1 HKD = 0.86 CNY, corresponding to a target price of 1.95 Hong Kong dollars. Guotai Haitong's main points are as follows: Performance review In 2025, the company achieved a main operating income of 12.6 billion yuan, flat year-on-year; after deducting perpetual bond interest, the net profit attributable to shareholders was 1.21 billion yuan, down 37.0% year-on-year. In 26Q1, the company achieved a main operating income of 3.09 billion yuan, down 13.1% year-on-year; net profit attributable to shareholders was 500 million yuan, down 51% year-on-year. Poor wind resources and declining electricity prices in 2025 led to a decline in electricity profit In 2025, poor wind resources nationwide, combined with declining electricity prices, led to a decline in the company's electricity profit. The bank calculated the net profit per unit electricity in 2025 to be 0.042 yuan, down 0.030 yuan year-on-year; (1) the electricity revenue in 2025 was 0.373 yuan (including wind power and photovoltaic at 0.390 and 0.267 yuan per unit, respectively, down 0.026 and -0.050 yuan per unit year-on-year), with the decline in electricity prices mainly due to the impact of new grid parity projects and market-based electricity transactions. (2) The electricity cost in 2025 was 0.275 yuan, up 0.006 yuan year-on-year, mainly due to a year-on-year decrease of 315 hours in wind power utilization and 333 hours in photovoltaic utilization. (3) Financial expenses decreased, and the electricity expenses in 2025 were down 0.007 yuan year-on-year, with the average financing cost falling to 2.41%. Downward trend in net profit per unit electricity in 26Q1 In 26Q1, the net profit per unit electricity was 0.061 yuan, down 0.05 yuan year-on-year. (1) Calculated a decrease in electricity revenue to 0.364 yuan; (2) Calculated a year-on-year increase in electricity cost to 0.241 yuan, mainly due to a year-on-year decrease of 82 hours in wind power utilization to 534 hours. Forecast for 2026 Assuming wind power and photovoltaic installation increase by 500,000 kilowatts each in 2026, with wind power utilization hours at 1850 and photovoltaic utilization hours at 1150, slightly lower compared to the previous year. Due to the implementation of Document No. 136 which allows wind and solar power to participate in market transactions, the annual electricity price is assumed to decrease by 0.01 yuan to 0.363 yuan. Cash flow calculations indicate that there is still room for financial expenses to decline, leading to a forecasted decrease in net profit per unit electricity to 0.034 yuan. The net profit attributable to shareholders after deducting perpetual bond interest for 2026 is estimated to be 725 million yuan, corresponding to a PE of 10.4 times, with the current PB (MRQ) at 0.39 times. Risk warnings Risk of declining electricity prices; Risk of new energy consumption.