Xinyi Energy Holdings Ltd

03868: XHKG (HKG)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	HK$5.29	Tcdty	Knzjdbjs

Xinyi Energy Earnings: Change in Dividend Policy a Negative Surprise to Investors

Chokwai Lee

Aug 1, 2023

Xinyi Energy’s first-half 2023 net profit of HKD 566.9 million, down 9.0% year on year, was below expectations. We believe the miss is mainly attributable to the depreciation of the Chinese yuan and more conservative assumptions on tariff adjustment. We cut our fair value estimate to HKD 2.64 from HKD 3.12 after updating our model assumptions. While the firm remains undervalued, we think share price performance will be weak in the near term, given negative investor sentiment after the disappointing change in the dividend policy.

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