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Xinyi Energy Holdings Ltd 03868

Morningstar Rating
HKD 1.06 +0.01 (0.95%)
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Company Report

Xinyi Energy Guides for a Flat Acquisition Target in 2024; Slow Subsidy Settlement Remains a Concern

Xinyi Energy Holdings is the solar farm operation unit of its holding company Xinyi Solar, a leading solar glass manufacturer and solar farm developer in China. Unlike most solar power suppliers with integrated upstream solar project development, Xinyi Energy mainly acquires utility-scale ground-mounted solar projects and focuses on downstream solar farm operations. The company's unique business model largely shields it from construction risks and regulatory risks such as project approvals, leading to a more stable returns profile. Previously, the company aimed to distribute not less than 90% of its distributable income annually. However, Xinyi Energy changed its dividend policy in 2023—it now considers the firm’s financial resources and funding needs, with no fixed payout ratio.

Price vs Fair Value

03868 is trading at a 35% discount.
Price
HKD 1.04
Fair Value
HKD 3.20
Uncertainty
High
1-Star Price
HKD 4.18
5-Star Price
HKD 6.65
Economic Moat
Gtjhc
Capital Allocation
Ccttkkyd

Bulls Say, Bears Say

Bulls

Growth in electricity consumption and China’s ambitious renewable targets driven by urgent need to reduce carbon emissions will favor Xinyi Energy’s offtake.

Bears

The shortfall in the government’s renewable energy fund has led to delays in subsidy collections.

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Trading Information

Previous Close Price
HKD 1.05
Day Range
HKD 1.051.08
52-Week Range
HKD 0.982.68
Bid/Ask
HKD 1.05 / HKD 1.06
Market Cap
HKD 8.75 Bil
Volume/Avg
7.6 Mil / 10.0 Mil

Key Statistics

Price/Earnings (Normalized)
8.45
Price/Sales
3.27
Dividend Yield (Trailing)
10.38%
Dividend Yield (Forward)
5.00%
Total Yield
10.38%

Company Profile

Listed in May 2019, Xinyi Energy is a spinoff from its holding company Xinyi Solar, and engages in solar farm operations in China. The company owns a portfolio of utility-scale ground-mounted solar farm projects, with total approved capacity of 3,650.5 megawatts by the end of 2023. Parent Xinyi Solar, a leading solar glass manufacturer and solar farm developer, retains about a 52% stake in Xinyi Energy.
Sector
Utilities
Industry
Utilities - Renewable
Stock Style Box
Mid Value
Total Number of Employees
385

Competitors

Valuation

Metric
03868
01816
01798
Price/Earnings (Normalized)
8.4511.373.74
Price/Book Value
0.651.070.61
Price/Sales
3.271.460.84
Price/Cash Flow
3.143.541.27
Price/Earnings
03868
01816
01798

Financial Strength

Metric
03868
01816
01798
Quick Ratio
1.000.431.59
Current Ratio
1.000.941.74
Interest Coverage
4.764.743.56
Quick Ratio
03868
01816
01798

Profitability

Metric
03868
01816
01798
Return on Assets (Normalized)
4.71%2.57%3.68%
Return on Equity (Normalized)
7.83%9.64%21.48%
Return on Invested Capital (Normalized)
6.79%4.04%5.85%
Return on Assets
03868
01816
01798
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