Reinitiating Coverage of China Resources Power With HKD 20.50 FVE; Shares Undervalued

We are reinitiating coverage of China Resources Power, or CR Power, with no-moat and stable moat trend ratings and a fair value estimate of HKD 20.50 per share. We think the shares are undervalued, with 2023 price/earnings of around 7.7 times and price/book ratio of 0.6 times, based on the Dec. 2 closing price. We believe positive development in subsidy settlement and the recovery in the thermal power segment’s profitability could help lift CR Power’s near-term share price performance.