China Resources Power Holdings Co Ltd
00836: XHKG (HKG)
| Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
|---|---|---|---|
| HKD 65.00 | Tbzjn | Kdpnwvyhd |
China Resources Power Earnings: Thermal Segment Recovery on Track; Shares Undervalued
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China Resources Power’s, or CR Power’s, 2023 net profit of HKD 11.0 billion trails our estimate, mainly due to asset impairment losses of HKD 2.7 billion, but key generation numbers were in line with our expectations. We cut our fair value estimate to HKD 23 per share from HKD 25 to factor in lower renewable tariffs and higher near-term capital expenditure, or capex. Nonetheless, we think CR Power is undervalued, with continued improvement in the thermal power segment’s profitability and an estimated 2024 yield of more than 5%.