CGN’s Q1 Largely In Line; Project Visibility a Positive but Largely Reflected in Share Price

We maintain our fair value estimate of no-moat CGN Power at HKD 2.30 per share, as the company’s first-quarter results delivered no major surprises, and China’s recent approval of six nuclear generation units are also within expectations, two of which are CGN Power’s Lufeng project. We maintain our full year net profit forecast of CNY 10.4 billion, as well as the five-year net profit growth CAGR of 3.8% through 2026, underpinned by visible project pipelines. We think the shares are fairly valued at the current level. Given the stable operation at nuclear power stations, we expect CGN Power’s cash flows to remain robust. This should support a steady growth in absolute dividend payouts, and the company’s proposed 2021 dividend of CNY 0.084 per share is yielding about 5% presently.