Datang Renewable Earnings: In Line Results; Capacity Expansion Drives Growth

We keep Datang Renewable’s, or DR’s, fair value estimate at HKD 3.38 per share following its largely in-line first-quarter 2023 results. Trading at a 2023 price/book ratio of 0.6 times and 2023 price/earnings of around 6 times, we believe there is still upside for DR’s share price performance. However, we think a higher margin of safety is warranted, given DR’s aggressive expansion plan, which could stretch its financial position. Our top pick in the sector is China Longyuan, given the firm’s leadership position and strong execution track record.