China Longyuan Power Group Corp Ltd Class H

00916: XHKG (HKG)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	HK$6.90	Xmgwp	Wsgyphgz

Transferring Coverage of China Longyuan With HKD 14 FVE; Robust Capacity Growth Ahead

Chokwai Lee

Dec 12, 2022

We are transferring coverage of China Longyuan with no-moat and stable moat trend ratings, and a fair value estimate of HKD 14. We estimate Longyuan’s net profit to grow at a five-year CAGR of 21.6% over our explicit forecast period, with operating margin rising to 40.3% in 2026 from the three-year historical average of 33.1%. We think the shares are attractive currently given the firm’s strong renewable energy capacity growth, with 2023 price/earnings of around 9 times.

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