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China Longyuan Power Group Corp Ltd Class H 00916

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Morningstar’s Analysis

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Longyuan's Q3 Profit Falls Year on Year With Coal-Fired Unit a Drag; Long-Term Growth Story Intact

Jennifer Song Senior Equity Analyst

Analyst Note

| Jennifer Song |

China Longyuan Power’s cumulative nine-month net profit of CNY 5.1 billion, up 30% year over year, was largely in line with expectations, with capacity expansion and better wind resources the key boosts. The result, however, points to a 9% year-over-year decline in third quarter net profit to CNY 518 million, which reflects significant underperformance by the company’s coal-fired generation units on sharply higher coal costs. We expect these coal cost pressures to ease with supply improving and seasonal tailwinds from February or March 2022.

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Company Profile

Business Description

Longyuan is China’s largest wind farm operator with installed capacity of 22 GW as of the end 2020, representing 7.9% of nationwide wind capacity. It has more than 300 wind farms spread across 29 regions in China, and has also expanded into Canada and South Africa. Longyuan also owns two coal-fired power plants in Jiangsu and operates other renewable assets such as solar, geothermal, and tidal energy on a limited scale. The power generation volume mix is about 83% wind, 17% thermal and the remainder in other renewables. China Energy Investment Corporation, which was created through the merger of China Guodian Corporation and China Shenhua Group, is the major shareholder with a controlling stake of 58.44%.

Contact
6 Fuchengmen North Street, Room 2006, 20th Floor, Block C
Beijing, China, People's Republic of
T +86 1066579988
Sector Utilities
Industry Utilities - Renewable
Most Recent Earnings
Fiscal Year End Dec 31, 2021
Stock Type
Employees 7,865