According to Zhitong Finance APP, CICC has released a research report stating that it essentially maintains unchanged earnings forecasts for TG SMART ENERGY (01083) for 2025 and 2026. The current stock price corresponds to 9.1x/8.8x P/E for 2025/2026. The firm maintains its Outperform rating and HK$5.00 target price, corresponding to 10.6x/10.2x P/E for 2025/2026, representing 16.3% upside potential from the current stock price.

CICC's main viewpoints are as follows:

1H25 Results Generally Meet Market Expectations The company announced 1H25 results: revenue of HK$10.44 billion, down 1% YoY; net profit of HK$758 million, up 2% YoY; core business profit of HK$719 million, up 2% YoY, which basically met market expectations. The company proposes to distribute its first interim dividend of HK$0.05 per share.

In 1H25, the company's natural gas sales volume was 8.75 billion cubic meters, flat YoY. The city gas spread was RMB0.57 per cubic meter, up RMB0.01 per cubic meter YoY. New residential connections totaled 330,000 households, down 1% YoY. Gas business operating profit was HK$852 million, down 1% YoY.

In 1H25, photovoltaic power generation was 1.18 billion kWh, up 44% YoY. Power generation gross margin was RMB0.36 per kWh, down RMB0.04 per kWh YoY. As of the end of 1H25, the company's photovoltaic grid-connected capacity was 2.6GW. Renewable energy business operating profit was HK$170 million, up 5% YoY.

"Photovoltaic-Storage Synergy" and "AI+ Synergy" Combined, Transforming into Intelligent Energy Aggregation Service Provider To address the impact of "Document 136" on distributed photovoltaic business power generation returns, the company will subsequently: 1) increase investment in industrial and commercial energy storage; 2) leverage AI algorithms, rooftop photovoltaics, energy storage, and industrial and commercial customer resources accumulated in the city gas sector to promote electricity sales business expansion. The medium to long-term goal is to transform into a globally leading intelligent energy aggregation service provider. The company targets managing 12GW of photovoltaic installed capacity and 6GWh of energy storage installed capacity by 2030.

Capital Expenditure Steadily Declining In 1H25, the company's capital expenditure was HK$1.4 billion, down 30% YoY. Looking ahead to 2H25, the firm expects the company's capital expenditure downward trend to continue, with full-year capital expenditure potentially decreasing to HK$2.5-3.0 billion. Considering that the company will continue to strictly control capital expenditure scale and promote some distributed photovoltaic installed capacity off-balance-sheet treatment, the firm believes the company's interest-bearing debt scale may remain stable or decline slightly.