Bank of Communications International has released a research report maintaining its target price of HK$8.23 and a Buy rating for China Longyuan Power Group Corporation Limited. The company's A-share private placement has been accepted and is currently under further review, pending subsequent approval and registration by the Shenzhen Stock Exchange and the China Securities Regulatory Commission before issuance at an opportune time. The bank believes the stock price correction of over 20% in the past month has partially reflected negative factors, and an improvement in the year-on-year growth trend of monthly power generation data could support a valuation recovery. Key points from Bank of Communications International are as follows:
Operations were weaker than expected, with a larger-than-expected year-on-year decline in 2025 profit. The company's 2025 profit fell 27% year-on-year to RMB 4.64 billion, below the bank's expectations, primarily due to lower-than-expected wind and solar power tariffs in the second half of the year, leading to a 3.9% year-on-year decrease in revenue. However, a 92% year-on-year reduction in asset impairment losses partially offset the impact. During the period, operating profit from wind and solar power was RMB 9.687 billion and RMB 1.152 billion, down 21.6% and up 121.1% year-on-year, respectively. Subsidy collections reached RMB 11.97 billion in 2025, a 124.5% year-on-year increase, driving a 28% rise in operating cash flow. The final dividend was RMB 0.062 per share, with a full-year dividend payout ratio of 29%.
Last year's operational performance was in line with the industry, though installed capacity at year-end was slightly below expectations. In 2025, the company's wind and solar power generation reached 63.086 billion kWh, up 4.91% and 70.85% year-on-year, respectively. The average utilization hours for wind power were 2,052 hours, down 138 hours year-on-year, while the curtailment rate increased, mainly due to rapid growth in national new energy installations, regional supply-demand imbalances, and an average wind speed decrease of 0.1 m/s in the company's project areas. Meanwhile, grid-connected tariffs for wind and solar power fell by 9.8% and 5.9% year-on-year, respectively, attributed to the expansion of market-oriented trading, an increase in parity projects, and structural adjustments. Total new controlled installed capacity for the full year 2025 was 4.85 GW, slightly below the original target of 5.5 GW, with wind and solar adding approximately 1.7 GW and 3.1 GW, respectively.
For 2026, the company is adjusting the pace and structure of capacity installation, with tariffs expected to have limited short-term downside. Looking ahead to 2026, the company plans to add 4.5 GW of new capacity, with wind and solar accounting for 94% and 6% respectively (approximately 4.23 GW from wind and 0.27 GW from solar). In terms of repowering old wind farms with larger turbines, the company plans to commence nine projects in 2026, with original capacity of 430 MW expanding significantly to 909 MW after renovation. The company has contracted power volume for 2026 set at 27.4 billion kWh (21.5 billion kWh from wind, 5.9 billion kWh from solar). Management expects that the annual contracted volume, combined with mechanism-based electricity, will account for about 70% of total annual electricity sales, with a higher proportion of mechanism-based electricity in southeastern regions compared to northwestern regions. Tariffs in 2026 may still see some decline but with limited room, expected to gradually stabilize, with existing mechanism-based tariffs remaining steady and new competitive bidding prices mostly close to the upper limit.
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