HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cgn-power-co-ltd-h" target="_blank" data-smartkarma-citation="entities:58:1" rel="noopener">CGN Power (1816 HK)</a>, as China's largest nuclear power company, has its profit outperformed coal-fired and wind power peers in 1H22 given its stable cost control and higher tariff.  </li>
<li>We expect contribution from Hongyanhe #6, normalised operations from existing projects, further margin expansion, solid project pipeline and positive new project potential to be the key earnings drivers. </li>
<li>Its target to reach capacity of 70GW by 2035 should underpin long-term outlook. YTD, the stock has outperformed most peers, yet valuation multiples are still cheaper than peer average.</li>
</ul>



CGN Power (1816 HK), as China's largest nuclear power company, has its profit outperformed coal-fired and wind power peers in 1H22 given its stable cost control and higher tariff.  
We expect contribution from Hongyanhe #6, normalised operations from existing projects, further margin expansion, solid project pipeline and positive new project potential to be the key earnings drivers. 
Its target to reach capacity of 70GW by 2035 should underpin long-term outlook. YTD, the stock has outperformed most peers, yet valuation multiples are still cheaper than peer average.


CGN Power (1816 HK): Building up Stronger Potential

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry. </li>
<li>Overall, net inflow was ~US$1.1bn, split evenly (roughly) between Shanghai and Shenzhen. </li>
<li>The largest inflows were into  <a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a> and <a href="https://www.smartkarma.com/entities/cnooc-ltd" target="_blank" data-smartkarma-citation="entities:175:1" rel="noopener">CNOOC Ltd (883 HK)</a>. The largest outflows were in <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a> and <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a>.</li>
</ul>


Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry. 
Overall, net inflow was ~US$1.1bn, split evenly (roughly) between Shanghai and Shenzhen. 
The largest inflows were into  China Mobile (941 HK) and CNOOC Ltd (883 HK). The largest outflows were in Kuaishou Technology (1024 HK) and BYD (1211 HK).


Shanghai/​Shenzhen Southbound Connect: Weekly Moves (27 May 2022)

<ul>
<li>Nov and Dec wind generation continue to accelerate on a YoY basis, and it is also noteworthy that other renewable energy generation surged 346% MoM and 992% YoY in Dec.</li>
<li>SASAC's latest guidance for the centrally-owned SOEs on installed renewable capacity target of over 50% of total by 2025 is another signal of strong government support on wind power.</li>
<li>Acceptance by Shenzhen Stock Exchange of <a href="https://www.smartkarma.com/entities/inner-mongolia-pingzhuang-energy-resources-co-ltd" target="_blank" data-smartkarma-citation="entities:4267:1" rel="noopener">Inner Mongolia PingZhuang Energy Resources (000780 CH)</a> listing withdrawal application marks another step towards <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> return to A-share.</li>
</ul>


Nov and Dec wind generation continue to accelerate on a YoY basis, and it is also noteworthy that other renewable energy generation surged 346% MoM and 992% YoY in Dec.
SASAC's latest guidance for the centrally-owned SOEs on installed renewable capacity target of over 50% of total by 2025 is another signal of strong government support on wind power.
Acceptance by Shenzhen Stock Exchange of Inner Mongolia PingZhuang Energy Resources (000780 CH) listing withdrawal application marks another step towards China Longyuan Power Group Corp (916 HK) return to A-share.


China Longyuan (916 HK): The Trend Is Your Friend

China Power International / Equity Bottom-Up

<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> has 20-30GW of potential clean energy project pipeline, and with its coal-fired power disposal plan, it has a strong case to achieve clean energy transformation. </li>
<li>Adjustment in tariff in Oct and new mechanism for 2022 tariff will see coal-fired profitability rebound. Potential asset injection from parent SPIC will also be positive long-term catalyst for CPI.  </li>
<li>We project its clean energy capacity growth may reach a CAGR of 44% in the 14th 5-year Plan, driving earnings momentum. Despite sharp rally YTD, valuations are still below peers. </li>
</ul>



China Power International (2380 HK) has 20-30GW of potential clean energy project pipeline, and with its coal-fired power disposal plan, it has a strong case to achieve clean energy transformation. 
Adjustment in tariff in Oct and new mechanism for 2022 tariff will see coal-fired profitability rebound. Potential asset injection from parent SPIC will also be positive long-term catalyst for CPI.  
We project its clean energy capacity growth may reach a CAGR of 44% in the 14th 5-year Plan, driving earnings momentum. Despite sharp rally YTD, valuations are still below peers. 


China Power International (2380 HK): Updates on an Ambitious Roadmap

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>As of Friday Nov 19, the average A/H premium of 134 A/H stocks are 109.3%. The average A/H premium changed by -1.4ppt over the past one week.</li>
<li>The sector with the biggest A/H premium increase was Utilities (ΔA/H premium=5.1ppt) while the sector with the biggest A/H premium decrease was Consumer Discretionary (ΔA/H premium=-13.1ppt).</li>
<li>The top 3 stocks based on increase in A/H premium in the past week were SINOPEC SHANG, YANTAI NORTH, and SINOPEC OILFIELD.</li>
</ul>


As of Friday Nov 19, the average A/H premium of 134 A/H stocks are 109.3%. The average A/H premium changed by -1.4ppt over the past one week.
The sector with the biggest A/H premium increase was Utilities (ΔA/H premium=5.1ppt) while the sector with the biggest A/H premium decrease was Consumer Discretionary (ΔA/H premium=-13.1ppt).
The top 3 stocks based on increase in A/H premium in the past week were SINOPEC SHANG, YANTAI NORTH, and SINOPEC OILFIELD.


A/H Premium Weekly: Utility Led the Premium Increase

China

Datang International Power Generation Company Limited develops and operates power plants, sells electricity, repairs and maintains power equipment, and provides power-related technical services.

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Datang International (991 HK)

CGN Power (1816 HK): Building up Stronger Potential

Contribution from Hongyanhe #6, normalised operations from existing projects, further margin expansion, solid project pipeline and positive new...

Osbert Tang, CFA

Shanghai/Shenzhen Southbound Connect: Weekly Moves (27 May 2022)

Overall, the total value increased US$1.8bn in the past week, with Shanghai accounting for US$1.9bn and Shenzhen (~US$0.2bn).

David Blennerhassett

China Longyuan (916 HK): The Trend Is Your Friend

Good generation trend is positive, particularly a sharp improvement in other renewables. SASAC's latest SOEs energy targets and a step closer to...

Osbert Tang, CFA

China Power International (2380 HK): Updates on an Ambitious Roadmap

Clean energy transformation will be supported by pipeline projects on hand and potential asset injection from parent. Coal-fired profitability...

Osbert Tang, CFA

A/H Premium Weekly: Utility Led the Premium Increase

We highlight the utility sector as the biggest A/H premium gainer and the Consumer Discretionary as the biggest A/H premium lager.

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

CGN Power (1816 HK): Building up Stronger Potential

Contribution from Hongyanhe #6, normalised operations from existing projects, further margin expansion, solid project pipeline and positive new...

Osbert Tang, CFA

Shanghai/​Shenzhen Southbound Connect: Weekly Moves (27 May 2022)

Overall, the total value increased US$1.8bn in the past week, with Shanghai accounting for US$1.9bn and Shenzhen (~US$0.2bn).

David Blennerhassett

China Longyuan (916 HK): The Trend Is Your Friend

Good generation trend is positive, particularly a sharp improvement in other renewables. SASAC's latest SOEs energy targets and a step closer to...

Osbert Tang, CFA

China Power International (2380 HK): Updates on an Ambitious Roadmap

Clean energy transformation will be supported by pipeline projects on hand and potential asset injection from parent. Coal-fired profitability...

Osbert Tang, CFA

A/H Premium Weekly: Utility Led the Premium Increase

We highlight the utility sector as the biggest A/H premium gainer and the Consumer Discretionary as the biggest A/H premium lager.

Ke Yan, CFA, FRM

Shanghai/Shenzhen Southbound Connect: Weekly Moves (27 May 2022)