Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Nearly 30 years of experience in the Korean/Asian equity research. Major sectors coverage include the following:
- Technology 
- Consumer 
- Special Situations/Deep Value Plays
- Tender Offers/M&As
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Korea/Asia, Events, IPOs

2022 High Conviction - China High Speed (658 HK): Renewable Energy Beneficiary

China High Speed Transmission (658): Hold for Long Term

HSCEI Index Rebalance Preview: Xinyi Solar Should Replace China Evergrande

Xinyi Solar Placement - Ultra-Strong Momentum but Its Highly Volatile

COP26: An Overview of Investment Themes and Catalysts Related to COP26 Conference

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Equity Bottom-Up

Xinyi Solar Holdings is one of the largest solar glass producers in the world. This year has been a breakthrough year for solar industry in China since solar has achieved grid parity in China. In 2021, this is the first year in which all newly completed utility scale and commercial distributed PV generation projects in China are operated on a grid-parity basis. This should have a significantly positive impact on major solar players such as Xinyi Solar. The following are the key catalysts for Xinyi Solar:1) Ambitious Plans to Increase Renewables &amp; Decrease Coal Announced at COP262) Higher Insider Purchase3) Accelerating Sales &amp; Profit Margins4) A likely upcoming inclusion of Xinyi Solar (968 HK) into the Hang Seng China Enterprises IndexValuation - Xinyi Solar is trading at EV/EBITDA multiples of 16.4x in 2021 and 14.6x in 2022. The comps are trading at an average EV/EBITDA of 20.1x in 2021 and 18.3x in 2022. However, Xinyi Solar has better metrics than its peers in terms of net margins, ROE, and sales growth. Therefore, we would argue that Xinyi Solar is undervalued and that it deserves to trade at higher valuation multiples.

Xinyi Solar Holdings is one of the largest solar glass producers in the world. This year has been a breakthrough year for solar industry in China since solar has achieved grid parity in China. In 2021, this is the first year in which all newly completed utility scale and commercial distributed PV generation projects in China are operated on a grid-parity basis. This should have a significantly positive impact on major solar players such as Xinyi Solar. The following are the key catalysts for Xinyi Solar:1) Ambitious Plans to Increase Renewables &amp; Decrease Coal Announced at COP262) Higher Insider Purchase3) Accelerating Sales &amp; Profit Margins4) A likely upcoming inclusion of Xinyi Solar (968 HK) into the Hang Seng China Enterprises IndexValuation - Xinyi Solar is trading at EV/EBITDA multiples of 16.4x in 2021 and 14.6x in 2022. The comps are trading at an average EV/EBITDA of 20.1x in 2021 and 18.3x in 2022. However, Xinyi Solar has better metrics than its peers in terms of net margins, ROE, and sales growth. Therefore, we would argue that Xinyi Solar is undervalued and that it deserves to trade at higher valuation multiples. 

Xinyi Solar: One of the Key Beneficiaries to Phase Out Coal and Increase Renewables