Company Reports

We made minor adjustments to China Suntien Green Energy's earnings forecasts to reflect additional details from its recently published annual report. As a result, we raise our fair value estimate marginally to HKD 3.82 per share from HKD 3.78. Trading at a 2024 price/earnings of around 5 times, we think the shares are attractive currently, supported by a decent five-year net profit CAGR of 12.2% and over 7.0% dividend yield in 2024.

China Suntien Green Energy, or Suntien, has wind power and photovoltaic projects across China, with consolidated renewable energy installed capacity of 6.42 gigawatts, or GW, as of end-2023. About 72% of the firm’s consolidated wind power installed capacity was in Hebei (4.54 GW). Suntien also sells natural gas and owns natural gas transmission and ancillary facilities in Hebei. We believe the renewable energy and natural gas businesses are complementary to each other, which help to reduce earnings volatility and diversify operational risks. While more than 90% of Suntien’s revenue was derived from Northern China, the firm is actively looking for opportunities in other regions as well as overseas.

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%.

China Suntien Green Energy, or Suntien, has wind power and photovoltaic projects across China, with consolidated renewable energy installed capacity of 6.42 gigawatts, or GW, as of end-2023. About 72% of the firm’s consolidated wind power installed capacity was in Hebei (4.54 GW). Suntien also sells natural gas and owns natural gas transmission and ancillary facilities in Hebei. We believe the renewable energy and natural gas businesses are complementary to each other, which help to reduce earnings volatility and diversify operational risks. While more than 90% of Suntien’s revenue was derived from Northern China, the firm is actively looking for opportunities in other regions as well as overseas.

Year-to-date share price performance of China utilities under our coverage was generally lackluster, and we believe the market remains concerned about slow subsidy settlements and falling tariffs. We maintained our fair value estimates per share for CGN Power (HKD 2.24); China Longyuan (HKD 12.00); China Resources Power, or CR Power (HKD 25.00); China Suntien Green Energy (HKD 3.66); China Three Gorges Renewables, or CTGR (CNY 4.68); and Datang Renewable, or DR (HKD 2.94). Our preference among the renewable players is China Longyuan given its strong capacity growth and leadership position in the sector. Meanwhile, CR Power is our pick for investors who like exposure to coal-fired power, as the recovery in profitability for the thermal power segment should continue in 2024.

We keep China Suntien Green Energy's fair value estimate at HKD 3.66 following largely in-line third-quarter 2023 results. Trading at 2024 price/earnings of around 5 times, we think the shares are attractive currently, supported by decent five-year net profit CAGR of 8.8% and over 7.0% dividend yield.

China Suntien Green Energy, or Suntien, has wind power and photovoltaic projects across China, with consolidated renewable energy installed capacity of 5.94 gigawatts, or GW, as of end-2022. About 75% of the firm’s consolidated wind power installed capacity was in Hebei (4.27 GW). Suntien also sells natural gas and owns natural gas transmission and ancillary facilities in Hebei. We believe the renewable energy and natural gas businesses are complementary to each other, which help to reduce earnings volatility and diversify operational risks. While more than 90% of Suntien’s revenue was derived from Northern China, the firm is actively looking for opportunities in other regions as well as overseas.

We lower no-moat China Suntien Green Energy's fair value estimate to HKD 3.66 from HKD 3.92 after considering the latest operating data and depreciation of China's yuan. Trading at 2023 price/earnings of around 6 times, we think the shares are attractive currently, supported by decent five-year net profit CAGR of 9.5% and over 7% dividend yield.

China Suntien Green Energy, or Suntien, has wind power and photovoltaic projects across China, with consolidated renewable energy installed capacity of 5.94 gigawatts, or GW, as of end-2022. About 75% of the firm’s consolidated wind power installed capacity was in Hebei (4.27 GW). Suntien also sells natural gas and owns natural gas transmission and ancillary facilities in Hebei. We believe the renewable energy and natural gas businesses are complementary to each other, which help to reduce earnings volatility and diversify operational risks. While more than 90% of Suntien’s revenue was derived from Northern China, the firm is actively looking for opportunities in other regions as well as overseas.

We are initiating coverage of China Suntien Green Energy with no-moat and stable moat trend ratings and a fair value estimate of HKD 3.92 per share. Trading at 2023 price/earnings of around 5 times, we think the shares are attractive currently, supported by decent five-year net profit CAGR of 9.6% and more than 6% dividend yield. As only about 10% of its subsidized renewable projects have yet to be included in the audited project list, we believe the impact from the ongoing subsidy audit should be limited. Meanwhile, given that the firm’s gas transmission tariff was cut in June 2022, we think further downside is unlikely in the near term.

China Suntien Green Energy, or Suntien, has wind power and photovoltaic projects across China, with consolidated renewable energy installed capacity of 5.94 gigawatts, or GW, as of end-2022. About 75% of the firm’s consolidated wind power installed capacity was in Hebei (4.27 GW). Suntien also sells natural gas and owns natural gas transmission and ancillary facilities in Hebei. We believe the renewable energy and natural gas businesses are complementary to each other, which help to reduce earnings volatility and diversify operational risks. While more than 90% of Suntien’s revenue was derived from Northern China, the firm is actively looking for opportunities in other regions, as well as overseas.