CGN Power’s First Half in Line; Visible Project Pipeline Underpins a Steady Growth Outlook

We maintain our fair value estimate for CGN Power at HKD 2.30 per share, following the company’s in-line first-half 2022 results, which reflect a stable operation at nuclear stations, with growth largely driven by commissioning of new projects. We maintain our full-year net profit forecast of CNY 10.4 billion, as well as the five-year net profit CAGR of 3.8% through 2026, underpinned by visible project pipelines. We think the shares are slightly undervalued as the market closed on Aug. 24. Given the stable operation at nuclear power stations, we expect CGN Power’s cash flows to remain robust, which should support a steady growth in absolute dividend payouts. Our estimated 2022 dividend of CNY 0.092 per share translates to a yield of about 5.7% presently.