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China Datang Corp Renewable Power Co Ltd Class H 01798

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Stock XHKG Rating as of
HKD 1.64 +0.01 (0.61%)
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As of Delayed Price Closed
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Company Report

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Datang Renewable Earnings: Results Hit by Lower Tariff, Higher Operating Costs, and Impairments

Chokwai Lee

We cut our fair value estimate for Datang Renewable, or DR, to HKD 2.00 per share from HKD 2.94 to account for worse-than-expected 2023 net profit, which fell 24% year on year to CNY 2.2 billion. The fall was mainly due to impairment losses, higher operating costs, and lower tariff. As a result, we cut our 2024-26 earnings forecasts by 17%-23%. With shares trading at a 2024 price/book ratio of 0.3 times, we think DR is undervalued. However, we think investors will stay on the sidelines until the firm’s tariff stabilizes and there are signs of quicker subsidy settlement by the government.

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Price vs Fair Value

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01798 is trading at a 19% discount.
Price
HKD 1.61
Fair Value
HKD 9.00
Uncertainty
High
1-Star Price
HKD 2.10
5-Star Price
HKD 7.70
Economic Moat
Llll
Capital Allocation
Fqc

Bulls Say, Bears Say

Bulls

Growth in electricity consumption and China’s carbon-neutral commitment by 2060 will favor DR’s offtake.

Bears

Government subsidies are at risk of payment delays, which raises the company’s accounts receivable, hurting cash flows.

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Trading Information

Previous Close Price
HKD 1.63
Day Range
HKD 1.61–1.67
52-Week Range
HKD 1.48–3.31
Bid/Ask
HKD 1.63 / HKD 1.64
Market Cap
HKD 11.93 Bil
Volume/Avg
8.6 Mil / 14.2 Mil

Key Statistics

Price/Earnings (Normalized)
3.74
Price/Sales
0.84
Dividend Yield (Trailing)
3.31%
Dividend Yield (Forward)
3.31%
Total Yield
3.31%

Company Profile

Datang Renewable is one of China’s leading wind power operators, with installed wind capacity of 13.0 gigawatts as of the end of 2023, representing 2.9% of the nationwide wind capacity. About 84.2% of the total installed capacity is wind power. The company also operates solar power plants on a smaller scale. China Datang Group is the major shareholder with a controlling stake of more than 60%.
Sector
Utilities
Industry
Utilities - Renewable
Stock Style Box
Mid Value
Total Number of Employees
4,076
Website
http://www.cdt-re.com

Competitors

Valuation

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Metric
01798
01816
00836
Price/Earnings (Normalized)
 3.7411.378.08
Price/Book Value
 0.611.071.11
Price/Sales
 0.841.460.92
Price/Cash Flow
 1.273.543.50
Price/Earnings
01798
01816
00836

Financial Strength

Metric
01798
01816
00836
Quick Ratio
 1.590.430.51
Current Ratio
 1.740.940.59
Interest Coverage
 3.564.744.69
Quick Ratio
01798
01816
00836

Profitability

Metric
01798
01816
00836
Return on Assets (Normalized)
 3.68%2.57%4.37%
Return on Equity (Normalized)
 21.48%9.64%16.01%
Return on Invested Capital (Normalized)
 5.85%4.04%6.39%
Return on Assets
01798
01816
00836
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