Daily BriefsUtilities Sector

Daily Brief Utilities: ENN Energy and more

In today’s briefing:

  • ENN Energy – Tear Sheet – Lucror Analytics

ENN Energy – Tear Sheet – Lucror Analytics

By Leonard Law, CFA

We view ENN Energy as “Low Risk” on the LARA scale. This reflects the company’s large scale and diversified business profile across Mainland China as well as its robust financial position, with low leverage. These are balanced against ENN Energy’s exposure to commodity price risks and potential changes in government policies. In addition, the company has ongoing related-party transactions.

Our fundamental Credit Bias on ENN Energy is “Stable”, supported by the defensive nature of the industry and the company’s good cash-flow generation. ENN Energy has maintained c. 1.0x net leverage over the past five years.

Controversies are “Immaterial” and the ESG Impact on Credit is “Neutral”. While natural gas is a fossil fuel, it has a lower carbon footprint compared to coal, and has been regarded as a “transition fuel” for countries currently dependent on coal (e.g. China and Indonesia). This will likely support strong gas demand over the next decade, particularly in developing countries.

We have a “Hold” recommendation on the XINAOG notes, with the 2.625 ’30s at 83.9/5.6%/5.7 years.

💡 Before it’s here, it’s on Smartkarma

Sign Up for Free

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

  • ✓ Unlimited Research Summaries
  • ✓ Personalised Alerts
  • ✓ Custom Watchlists
  • ✓ Company Data and News
  • ✓ Events & Webinars