HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

China Power International / Equity Bottom-Up

<ul>
<li>Power output for <a href="https://www.smartkarma.com/entities/china-power-international" target="_blank" data-smartkarma-citation="entities:15548:1" rel="noopener">China Power International (2380 HK)</a> is healthy in Jul-Aug, following the solid trend in 1H23. The drop in hydropower has moderated and wind and solar stayed decent.</li>
<li>Capacity growth will reach 43% in FY23. With just 7.8% YoY in 1H23, most of the new capacity will be added in 4Q23, accelerating both output and profitability.</li>
<li>The parent SPIC's massive clean energy assets are candidates for potential injection. CPI's high EPS CAGR of 28.8% means that it well deserves premium valuation multiples. </li>
</ul>


Power output for China Power International (2380 HK) is healthy in Jul-Aug, following the solid trend in 1H23. The drop in hydropower has moderated and wind and solar stayed decent.
Capacity growth will reach 43% in FY23. With just 7.8% YoY in 1H23, most of the new capacity will be added in 4Q23, accelerating both output and profitability.
The parent SPIC's massive clean energy assets are candidates for potential injection. CPI's high EPS CAGR of 28.8% means that it well deserves premium valuation multiples. 


China Power International (2380 HK): Continuing the Turnaround Trend

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 114.4% as of Sep 8th.</li>
<li>The average A-H premium changed by -3.9ppt week on week, led by real estate, consumer staples, communication services and offset by consumer discretionary.</li>
<li>We highlight weekly changes in A-H premium for Huadian Power, Huaneng Power, Shanghai Elect, China Longyuan, Aluminum Corp.</li>
</ul>


We analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 114.4% as of Sep 8th.
The average A-H premium changed by -3.9ppt week on week, led by real estate, consumer staples, communication services and offset by consumer discretionary.
We highlight weekly changes in A-H premium for Huadian Power, Huaneng Power, Shanghai Elect, China Longyuan, Aluminum Corp.


A-H Premium Weekly (Sep 8th): Huadian Power, Huaneng Power, Shanghai Electric, China Longyuan

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-longyuan-power-group-corp-ltd" target="_blank" data-smartkarma-citation="entities:14215:1" rel="noopener">China Longyuan Power (916 HK)</a> is now attractively priced at 5.9x and 5.2x PERs for FY23 and FY24, respectively. The 2Q23 result clearly showed that business is gathering momentum.</li>
<li>Margins have demonstrated good improvement despite weaker tariffs and coal sale business. With a very low base in last year, its 2H23 earnings growth will be impressive.</li>
<li>There is positive progress on new project sign-up which has secured its pipeline. Asset injection from parent will stay as a major theme in the next two years.</li>
</ul>



China Longyuan Power (916 HK) is now attractively priced at 5.9x and 5.2x PERs for FY23 and FY24, respectively. The 2Q23 result clearly showed that business is gathering momentum.
Margins have demonstrated good improvement despite weaker tariffs and coal sale business. With a very low base in last year, its 2H23 earnings growth will be impressive.
There is positive progress on new project sign-up which has secured its pipeline. Asset injection from parent will stay as a major theme in the next two years.


China Longyuan (916 HK): Value Has Definitely Emerged

<ul>
<li>We analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 119.3% as of Sep 1st.</li>
<li>The average A-H premium changed by 2.6ppt week on week, led by information technology, consumer discretionary, health care and offset by financials, utilities.</li>
<li>We highlight weekly changes in A-H premium for Zhejiang Shiba, Cansino Biolog, Nanjing Panda, China Railway, Hua Hong Semi and Cc Securities.</li>
</ul>


We analyse the changes of A-H premium on 146 stocks over the last week. The average A-H premium was 119.3% as of Sep 1st.
The average A-H premium changed by 2.6ppt week on week, led by information technology, consumer discretionary, health care and offset by financials, utilities.
We highlight weekly changes in A-H premium for Zhejiang Shiba, Cansino Biolog, Nanjing Panda, China Railway, Hua Hong Semi and Cc Securities.


A-H Premium Weekly (Sep 1st):Zhejiang Shiba, Cansino Biolog, Nanjing Panda, China Railway

<ul>
<li>We analyze the monthly Hong Kong Connect flows with our data engine.</li>
<li>We tabulate the top stocks by inflows, outlfows, and holding by mainland investors.</li>
<li>We highlight flows for Meituan, Kuaishou, CNOOC, PetroChina, Tencent, BYD, HSBC, HKEx.</li>
</ul>


We analyze the monthly Hong Kong Connect flows with our data engine.
We tabulate the top stocks by inflows, outlfows, and holding by mainland investors.
We highlight flows for Meituan, Kuaishou, CNOOC, PetroChina, Tencent, BYD, HSBC, HKEx.


Hong Kong Connect Flows (July): Meituan, Kuaishou, CNOOC, PetroChina, Tencent, BYD, HSBC, HKEx

China

Huadian Power International Corporation Limited generates and sells electricity which is all fed into the Shandong Provincial Grid operated by Shandong Electric Power (Group) Corporation (SEPCO), the immediate holding company of the Company.  The Company also sells heat.

Guangxi Guiguan Electric Power Co.,Ltd. operates power generation businesses. The Company provides hydroelectric power and other power products. Guangxi Guiguan Electric Power also produces thermal power, wind power, and other power products.

Sichuan Chuantou Energy Co., Ltd. invests in electric power projects through its subsidiaries, the Company also develops and manufactures cable, railroad control systems and other automation equipment.

China Longyuan Power Group Corp Ltd designs, develops, manages, and operates wind farms.  The Company also sells the electricity generated by the wind farms.

Jiangsu Eastern Shenghong Co., Ltd. manufactures and distributes textile products. The Company produces polyester filament and other chemical fiber products. Jiangsu Eastern Shenghong also conducts electricity-heat generation and petrochemical businesses.

Jiangsu Eastern Shenghong Co., Ltd. (000301 CH)

Zhejiang Zheneng Electric Power Co., Ltd. supplies electric power through operating thermal power generation.  The Company also involves in the research and development of electric power, power and energy-saving technology development, technical consulting, sales of energy-saving products, electrical engineering and asset management.

Zhejiang Zheneng Electric Power A (600023 CH)

Datang International Power Generation Co.,Ltd offers power generation services. The Company provides power project development, electricity transmission, and power distribution services. Datang International Power Generation also conducts coal, coal chemistry, transport, and recycling businesses.

Datang International Power Gen (601991 CH)

GD Power Development Co., Ltd. generates and distributes electric power and heat throughout China.  The Company also invests in new energy development and environmental protection projects.

Shenergy Company Limited develops, constructs, and invests in electric power and other energy related projects.  The Company distributes electric power, heat, and gas.

Shenzhen Energy Group Company, Ltd. generates and distributes electricity and gas. The Company supplies power to cities in the Peoples Republic of China, including Shenzhen, Huizhou and Dongguan, Guangdong Province.

Shenzhen Energy Group Co, Ltd. (000027 CH)

Meridian Energy Ltd. operates as a state-owned electricity generator. The Company produces hydro-electric power and supplies electricity to residential, business, and rural customers. Meridian Energy provides services throughout New Zealand.

NHPC Ltd is a hydro-power development company based in India. The Company has constructed approximately 11 hydro-power projects in India and abroad with a total installed capacity of 2554.35 MW.

The AES Corporation acquires, develops, owns, and operates generation plants and distribution businesses in several countries. The Company sells electricity under long term contracts and serves customers under its regulated utility businesses. AES also mines coal, turns seawater into drinking water, and develops alternative sources of energy.

Engie Brasil Energia S.A. operates as an independent power producer. The Company offers exploration and production, transportation, distribution, and trading of electricity and natural gas. Engie Brasil Energia serves customers in Brazil.

China Resources Power Holdings Company Limited is a power generation company. The Company invests, develops, owns, and operates coal-fired power plants in China.

Talen Energy Corporation provides utility services. The Company generates, distributes, transmits, and markets electricity, as well as produces and supplies natural gas and other renewable energy products for residential and commercial users. Talen Energy serves customers in the United States.

China Power International Development Limited, through its subsidiaries, develops, constructs, owns, manages, and operates large power plants in China.

Aboitiz Power Corporation provides hydroelectric power generation.

JSW Energy Limited generates power by using Corex gas and coal. The Company, through its subsidiary, also operates lignite thermal power plant in Rajasthan and has a capacity to produce 3,140 megawatts of electricity. JSW is also present in the power trading and transmission businesses.

Ormat Technologies, Inc. develops and operates renewable energy projects. The Company offers geothermal, recovered energy, and energy management and storage solutions. Ormat Technologies serves customers worldwide.

Huaneng Power International, Inc. develops, constructs, owns and operates coal-fired power plants throughout China. It also builds gas-fired, hydroelectric and wind power generation in China and owns Tuas Power which controls power generation facilities in Singapore.

Price Gauge
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Huaneng Power Intl Inc H (902 HK)

China Power International (2380 HK): Continuing the Turnaround Trend

CPI's capacity growth is expected to reach 43% in FY23, with most of them to be added in 4Q23, boosting output and profitability. Its high EPS CAGR...

Osbert Tang, CFA

A-H Premium Weekly (Sep 8th): Huadian Power, Huaneng Power, Shanghai Electric, China Longyuan

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Huadian Power, Huaneng Power, Shanghai Electric, China...

Ke Yan, CFA, FRM

China Longyuan (916 HK): Value Has Definitely Emerged

Longyuan is attractively priced and showing strong business momentum, with improved margins and impressive growth. New project sign-ups and asset...

Osbert Tang, CFA

A-H Premium Weekly (Sep 1st):Zhejiang Shiba, Cansino Biolog, Nanjing Panda, China Railway

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Zhejiang Shiba, Cansino Biolog, Nanjing Panda, China Railway.

Ke Yan, CFA, FRM

Hong Kong Connect Flows (July): Meituan, Kuaishou, CNOOC, PetroChina, Tencent, BYD, HSBC, HKEx

We analyzed the Hong Kong Connect Scheme for July and highlight flows for Meituan, Kuaishou, CNOOC, PetroChina, Tencent, BYD, HSBC, HKEx.

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China Power International (2380 HK): Continuing the Turnaround Trend

CPI's capacity growth is expected to reach 43% in FY23, with most of them to be added in 4Q23, boosting output and profitability. Its high EPS CAGR...

Osbert Tang, CFA

A-H Premium Weekly (Sep 8th): Huadian Power, Huaneng Power, Shanghai Electric, China Longyuan

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Huadian Power, Huaneng Power, Shanghai Electric, China...

Ke Yan, CFA, FRM

China Longyuan (916 HK): Value Has Definitely Emerged

​Longyuan is attractively priced and showing strong business momentum, with improved margins and impressive growth. New project sign-ups and asset...

Osbert Tang, CFA

A-H Premium Weekly (Sep 1st):Zhejiang Shiba, Cansino Biolog, Nanjing Panda, China Railway

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Zhejiang Shiba, Cansino Biolog, Nanjing Panda, China Railway.

Ke Yan, CFA, FRM

Hong Kong Connect Flows (July): Meituan, Kuaishou, CNOOC, PetroChina, Tencent, BYD, HSBC, HKEx

We analyzed the Hong Kong Connect Scheme for July and highlight flows for Meituan, Kuaishou, CNOOC, PetroChina, Tencent, BYD, HSBC, HKEx.

Ke Yan, CFA, FRM

Longyuan is attractively priced and showing strong business momentum, with improved margins and impressive growth. New project sign-ups and asset...