Daily Brief Utilities: Adani Total Gas, CGN Power and more

In today’s briefing:

S&P BSE Quiddity Leaderboard Dec 2022: Multiple Adani Names with F&O Question Marks
CGN Power (1816 HK): No Nuclear Jitters
CGN Power (1816 HK): Building up Stronger Potential

S&P BSE Quiddity Leaderboard Dec 2022: Multiple Adani Names with F&O Question Marks

In this insight, we take a look at the names leading the race to become ADDs/DELs for the BSE SENSEX, 100, 200, and 500 Indices in the December 2022 Rebalance.
Based on the latest data, I expect one ADD/DEL for SENSEX, one ADD/DEL for BSE 100, and 3 ADDs/DELs for BSE 200.
The potential ADDs/DELs for SENSEX could see index flows of US$100mn or more but the other index changes are both small in size and volume impact (days-to-trade).

Nuclear power is a clean energy source that contributes to energy savings and emissions reduction in society.
SASAC backed CGN Power (1816 HK) is China’s leading nuclear play, accounting for 55% of on-grid nuclear power generation, but just 1.2% of China’s total installed capacity of power generation.
As one of the few listed nuclear -plays in Asia, CGN trades at undemanding multiples, together with an attractive ROE and yield.

CGN Power (1816 HK), as China’s largest nuclear power company, has its profit outperformed coal-fired and wind power peers in 1H22 given its stable cost control and higher tariff.
We expect contribution from Hongyanhe #6, normalised operations from existing projects, further margin expansion, solid project pipeline and positive new project potential to be the key earnings drivers.
Its target to reach capacity of 70GW by 2035 should underpin long-term outlook. YTD, the stock has outperformed most peers, yet valuation multiples are still cheaper than peer average.

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