HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

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

<ul>
<li>
<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> will enjoy another year of strong earnings improvement in FY23, as coal-fired segment returns to profit and new energy capacity drives growth.</li>
<li>Solar and wind capacity will increase 66.5% and 23.1%, respectively, raising new energy's proportion to over 70%. Profitability for hydropower also looks to recover in this year.</li>
<li>There is huge room for asset injection from SPIC given the parent's new energy capacity of 139GW, with only 20GW in CPI. Its FY23 PER of 8.4x PER is attractive. </li>
</ul>



China Power International (2380 HK) will enjoy another year of strong earnings improvement in FY23, as coal-fired segment returns to profit and new energy capacity drives growth.
Solar and wind capacity will increase 66.5% and 23.1%, respectively, raising new energy's proportion to over 70%. Profitability for hydropower also looks to recover in this year.
There is huge room for asset injection from SPIC given the parent's new energy capacity of 139GW, with only 20GW in CPI. Its FY23 PER of 8.4x PER is attractive. 


China Power International (2380 HK): This Will Be a Rewarding Year

Thematic (Sector/Industry)

<ul>
<li>Although 5% GDP growth target for 2023 is at the low end of market speculation of 5.5-6%, we think this reflects the government's conservative stance amid post-COVID recovery. </li>
<li>A 0.2pp higher budget deficit and a special purpose bond quota of Rmb3.8trn suggested that government spending will stay as important economic driver.</li>
<li>Consumption is another major stimulus for economic growth, and more supportive measures will be rolled out - we have seen many cities planning to hand out consumption vouchers.</li>
</ul>


Although 5% GDP growth target for 2023 is at the low end of market speculation of 5.5-6%, we think this reflects the government's conservative stance amid post-COVID recovery. 
A 0.2pp higher budget deficit and a special purpose bond quota of Rmb3.8trn suggested that government spending will stay as important economic driver.
Consumption is another major stimulus for economic growth, and more supportive measures will be rolled out - we have seen many cities planning to hand out consumption vouchers.


China NPC: Implications of Government Working Report 2023

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyse the changes of A-H premium on 160 stocks over the last week. The average A-H premium was 62.9% as of Nov 28th.</li>
<li>The average A-H premium changed by -0.9ppt week-on-week, led by industrials, energy and offset by real estate, information technology, communication services.</li>
<li>We highlight weekly changes in A-H premium for Guangzhou Automobile, China Everbright Bank, China Southern Airlines, Cig Shanghai.</li>
</ul>


We analyse the changes of A-H premium on 160 stocks over the last week. The average A-H premium was 62.9% as of Nov 28th.
The average A-H premium changed by -0.9ppt week-on-week, led by industrials, energy and offset by real estate, information technology, communication services.
We highlight weekly changes in A-H premium for Guangzhou Automobile, China Everbright Bank, China Southern Airlines, Cig Shanghai.


A-H Premium Weekly (Nov 28th): Guangzhou Automobile, China Everbright Bank, China Southern Airlines

<ul>
<li>We analyse the changes of A-H premium on 160 stocks over the last week. The average A-H premium was 63.5% as of Nov 21st.</li>
<li>The average A-H premium changed by 2.5ppt week-on-week, led by information technology, materials, financials and offset by health care.</li>
<li>We highlight weekly changes in A-H premium for Tianqi Lithium, BOC, CSSC O&amp;M Engineering, China Coal Energy, CATL, Sinopec.</li>
</ul>


We analyse the changes of A-H premium on 160 stocks over the last week. The average A-H premium was 63.5% as of Nov 21st.
The average A-H premium changed by 2.5ppt week-on-week, led by information technology, materials, financials and offset by health care.
We highlight weekly changes in A-H premium for Tianqi Lithium, BOC, CSSC O&amp;M Engineering, China Coal Energy, CATL, Sinopec.


A-H Premium Weekly (Nov 21st): Tianqi Lithium, BOC, CSSC O&M Engineering, China Coal Energy, CATL

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 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

China Power International (2380 HK): This Will Be a Rewarding Year

FY23 will be an exciting year for CPI as coal-fired, wind & solar, hydro and new innovation segments will all see better profitability. Potential...

Osbert Tang, CFA

China NPC: Implications of Government Working Report 2023

A 0.2pp higher budget deficit and a Rmb3.8trn special purpose bond quota suggested government spending will remain important economic driver. More...

Osbert Tang, CFA

A-H Premium Weekly (Nov 28th): Guangzhou Automobile, China Everbright Bank, China Southern Airlines

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Guangzhou Automobile, China Everbright Bank, China Southern...

Ke Yan, CFA, FRM

A-H Premium Weekly (Nov 21st): Tianqi Lithium, BOC, CSSC O&M Engineering, China Coal Energy, CATL

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Tianqi Lithium, BOC, CSSC O&M Engineering, China Coal...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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