External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>China Longyuan (CLY)’s operating data in Oct 2023 was lower than our expectation, with a YoY decline of 10.99% in total power generation due to lower wind power generation.</li><li>However, thermal power and other renewable power showed solid growth. CLY has implemented share buyback to demonstrate confidence in its operations.</li><li>Additionally, as a pioneer of renewable power operator in China, CLY is expected to benefit from the collaborative efforts of China and the US to triple global renewable energy installed capacity by 2030. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Longyuan (CLY)’s operating data in Oct 2023 was lower than our expectation, with a YoY decline of 10.99% in total power generation due to lower wind power generation.However, thermal power and other renewable power showed solid growth. CLY has implemented share buyback to demonstrate confidence in its operations.Additionally, as a pioneer of renewable power operator in China, CLY is expected to benefit from the collaborative efforts of China and the US to triple global renewable energy installed capacity by 2030. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Longyuan (916 HK) – Oct Operating Data Recap

HK/China Equity Long-Short

Osbert Tang, CFA

In a management update by <a href="https://www.smartkarma.com/entities/china-longyuan-power-group-corp-ltd" target="_blank" data-smartkarma-citation="entities:14215:1" rel="noopener">China Longyuan Power Group Corp (916 HK)</a>, the company highlights that outlook stays positive and see no company- and industry-specific reasons for the recent retreat in share price. In fact, Longyuan believes that it is on track to reach its target to achieve utilisation hours of 2,240 for the full-year and the Sep generation figures (+21.7% YoY for wind generation and +15.8% YoY) remain very decent performance.Longyuan also shared that there will not be significant impact of the recent rise in coal price on its coal-fired power stations, thanks to its own coal trading business which provides a hedge. Other positive developments including the good progress on A-share listing, derived benefit from relaxation of coal-fired power tariffs and increase in power trading. However, offshore wind project will remain on elevated capital costs but Longyuan notes that it is in a good position to secure new projects.

In a management update by China Longyuan Power Group Corp (916 HK), the company highlights that outlook stays positive and see no company- and industry-specific reasons for the recent retreat in share price. In fact, Longyuan believes that it is on track to reach its target to achieve utilisation hours of 2,240 for the full-year and the Sep generation figures (+21.7% YoY for wind generation and +15.8% YoY) remain very decent performance.Longyuan also shared that there will not be significant impact of the recent rise in coal price on its coal-fired power stations, thanks to its own coal trading business which provides a hedge. Other positive developments including the good progress on A-share listing, derived benefit from relaxation of coal-fired power tariffs and increase in power trading. However, offshore wind project will remain on elevated capital costs but Longyuan notes that it is in a good position to secure new projects.  

China Longyuan (916 HK): Takeaways from Management Update

<ul><li>China Longyuan (CLY) reported revenue of RMB28.097bn for 1Q-3Q23, experiencing a 7.00% YoY decrease.</li><li>However, its net profit saw a notable increase of 18.95% YoY to RMB6.379bn thanks to a rapid rise in newly added installed capacity of wind and solar power and lower operating costs.</li><li>Additionally, CLY is actively focusing on “substitution of large for small" of old wind turbines to enhance long-term results and is actively engaged in green electricity and certificate trading. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Longyuan (CLY) reported revenue of RMB28.097bn for 1Q-3Q23, experiencing a 7.00% YoY decrease.However, its net profit saw a notable increase of 18.95% YoY to RMB6.379bn thanks to a rapid rise in newly added installed capacity of wind and solar power and lower operating costs.Additionally, CLY is actively focusing on “substitution of large for small" of old wind turbines to enhance long-term results and is actively engaged in green electricity and certificate trading. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Longyuan (916 HK) – Lead the Way as the Renewable Frontrunner

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-longyuan-power-group-corp-ltd" target="_blank" data-smartkarma-citation="entities:14215:1" rel="noopener">China Longyuan Power (916 HK)</a> is now attractively priced at 5.9x and 5.2x PERs for FY23 and FY24, respectively. The 2Q23 result clearly showed that business is gathering momentum.</li>
<li>Margins have demonstrated good improvement despite weaker tariffs and coal sale business. With a very low base in last year, its 2H23 earnings growth will be impressive.</li>
<li>There is positive progress on new project sign-up which has secured its pipeline. Asset injection from parent will stay as a major theme in the next two years.</li>
</ul>



China Longyuan Power (916 HK) is now attractively priced at 5.9x and 5.2x PERs for FY23 and FY24, respectively. The 2Q23 result clearly showed that business is gathering momentum.
Margins have demonstrated good improvement despite weaker tariffs and coal sale business. With a very low base in last year, its 2H23 earnings growth will be impressive.
There is positive progress on new project sign-up which has secured its pipeline. Asset injection from parent will stay as a major theme in the next two years.


China Longyuan (916 HK): Value Has Definitely Emerged

China Power International / Equity Bottom-Up

<ul>
<li>The Rmb10.8bn acquisition of clean energy assets from parent by <a href="https://www.smartkarma.com/entities/china-power-international" target="_blank" data-smartkarma-citation="entities:15548:1" rel="noopener">China Power International (2380 HK)</a> is positive in raising its clean energy proportion to over 70% of total capacity.</li>
<li>The drop in share price reflects concerns about elevation of gearing and the need for potential equity funding. However, even all equity financing scenario will only dilute EPS by 1%.</li>
<li>We think its earnings quality will improve, balance sheet will be enhanced and profitability will be raised. Its 1H23 positive profit alert also showed a recovery in operational performance. </li>
</ul>


The Rmb10.8bn acquisition of clean energy assets from parent by China Power International (2380 HK) is positive in raising its clean energy proportion to over 70% of total capacity.
The drop in share price reflects concerns about elevation of gearing and the need for potential equity funding. However, even all equity financing scenario will only dilute EPS by 1%.
We think its earnings quality will improve, balance sheet will be enhanced and profitability will be raised. Its 1H23 positive profit alert also showed a recovery in operational performance. 


China Power International (2380 HK): A Major Move to Raise Clean Energy Exposure

China

China Longyuan Power Group Corp Ltd designs, develops, manages, and operates wind farms.  The Company also sells the electricity generated by the wind farms.

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China Longyuan Power (916 HK)

China Longyuan (916 HK) – Oct Operating Data Recap

China Longyuan (CLY)’s operating data in Oct 2023 was lower than our expectation, with a YoY decline of 10.99% in total power generation due to...

CMB International

China Longyuan (916 HK): Takeaways from Management Update

We think China Longyuan's update is positive, especially it highlights on track to achieve full-year utilisation hours and downplays the impact of...

Osbert Tang, CFA

China Longyuan (916 HK) – Lead the Way as the Renewable Frontrunner

China Longyuan (CLY) reported revenue of RMB28.097bn for 1Q-3Q23, experiencing a 7.00% YoY decrease. However, its net profit saw a notable increase...

CMB International

China Longyuan (916 HK): Value Has Definitely Emerged

Longyuan is attractively priced and showing strong business momentum, with improved margins and impressive growth. New project sign-ups and asset...

Osbert Tang, CFA

China Power International (2380 HK): A Major Move to Raise Clean Energy Exposure

CPI's Rmb10.8bn acquisition from its parent will make clean energy reach 70% of total capacity. The move will enhance earnings by 10% and an all...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China Longyuan (916 HK) – Oct Operating Data Recap

China Longyuan (CLY)’s operating data in Oct 2023 was lower than our expectation, with a YoY decline of 10.99% in total power generation due to...

CMB International

China Longyuan (916 HK): Takeaways from Management Update

We think China Longyuan's update is positive, especially it highlights on track to achieve full-year utilisation hours and downplays the impact of...

Osbert Tang, CFA

China Longyuan (916 HK) – Lead the Way as the Renewable Frontrunner

China Longyuan (CLY) reported revenue of RMB28.097bn for 1Q-3Q23, experiencing a 7.00% YoY decrease. However, its net profit saw a notable increase...

CMB International

China Longyuan (916 HK): Value Has Definitely Emerged

​Longyuan is attractively priced and showing strong business momentum, with improved margins and impressive growth. New project sign-ups and asset...

Osbert Tang, CFA

China Power International (2380 HK): A Major Move to Raise Clean Energy Exposure

CPI's Rmb10.8bn acquisition from its parent will make clean energy reach 70% of total capacity. The move will enhance earnings by 10% and an all...

Osbert Tang, CFA

Longyuan is attractively priced and showing strong business momentum, with improved margins and impressive growth. New project sign-ups and asset...