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China Suntien Green Energy Corp Ltd Class H 00956

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Stock XHKG Rating as of
HKD 3.21 −0.01 (0.31%)
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Company Report

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China Suntien Earnings: Resilient Natural Gas Business Offsets Weakness in New Energy Segment

Chokwai Lee

No-moat China Suntien Green Energy's 2023 net profit of CNY 2.2 billion, down 3% year on year, beat our expectation. This was largely due to stronger earnings from the natural gas business that offset the softer performance of the renewable energy segment. We raise our 2024-26 earnings forecasts by 1%-6% to factor in the better results, and we increase our fair value estimate to HKD 3.78 per share from HKD 3.66. Trading at 2024 price/earnings of around 5 times and over 8% dividend yield, we think the shares are attractive, underpinned by a five-year net profit compound annual growth rate of 12%.

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Price vs Fair Value

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00956 is trading at a 15% discount.
Price
HKD 3.22
Fair Value
HKD 5.42
Uncertainty
High
1-Star Price
HKD 8.86
5-Star Price
HKD 4.93
Economic Moat
Pytsy
Capital Allocation
Zghkpsdz

Bulls Say, Bears Say

Bulls

China’s policies to encourage the use of clean energy, such as natural gas, solar and wind will continue to benefit Suntien.

Bears

Increasing contribution from grid-parity projects will lower Suntien’s future returns.

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Trading Information

Previous Close Price
HKD 3.22
Day Range
HKD 3.15–3.22
52-Week Range
HKD 2.47–3.46
Bid/Ask
HKD 3.19 / HKD 3.21
Market Cap
HKD 13.44 Bil
Volume/Avg
9.5 Mil / 9.9 Mil

Key Statistics

Price/Earnings (Normalized)
5.76
Price/Sales
0.57
Dividend Yield (Trailing)
6.80%
Dividend Yield (Forward)
6.80%
Total Yield
6.80%

Company Profile

China Suntien Green Energy is engaged in the wind power, photovoltaic, and natural gas businesses. The natural gas segment is involved in the sales of natural gas and gas appliances, and the provision of construction and connection services of natural gas pipelines. The wind and solar energy segment sells electricity to external grid companies by operating wind farms and solar energy plants. In 2023, the firm’s natural gas transmission volume was 5,114 million cubic meters, while sales volume of electricity was 13.93 billion kilowatt-hours. As of end-2023, the firm had consolidated renewable energy (wind and solar) installed capacity of 6.42 gigawatts.
Sector
Utilities
Industry
Utilities - Diversified
Stock Style Box
Mid Value
Total Number of Employees
2,696
Website
https://www.suntien.com

Competitors

Valuation

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Metric
00956
01798
02688
Price/Earnings (Normalized)
 5.763.7810.65
Price/Book Value
 0.560.611.62
Price/Sales
 0.570.850.60
Price/Cash Flow
 —1.297.55
Price/Earnings
00956
01798
02688

Financial Strength

Metric
00956
01798
02688
Quick Ratio
 0.661.590.68
Current Ratio
 0.761.740.74
Interest Coverage
 3.913.5614.24
Quick Ratio
00956
01798
02688

Profitability

Metric
00956
01798
02688
Return on Assets (Normalized)
 3.60%3.68%7.32%
Return on Equity (Normalized)
 13.67%21.48%18.73%
Return on Invested Capital (Normalized)
 5.71%5.85%11.56%
Return on Assets
00956
01798
02688
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