• RE-ITERATE Buy Entry – 22 Target – 26.5 Stop Loss – 20
  • CGN New Energy Holdings Co., Ltd. is an investment holding company mainly engaged in the operation of power plants. Along with subsidiaries, the Company operates its business through three segments. The Power Plants in Korea segment is engaged in the generation and supply of electricity. It is involved in the projects, including Daesan I Power Project, among others. The Power Plants in the PRC segment are engaged in the generation and supply of electricity. It mainly engages in wind power and solar power projects. The Management Companies segment is engaged in the provision of management services to power plants operated by CGN and its subsidiaries. The Company is involved in the wind, solar, gas-fired, coal-fired, oil-fired, hydro, cogen and fuel cell and steam projects.
  • Key financial highlights:
(USD mn)1H211H20YoY change
Revenue79759334.4%
Gross profit45432340.6%
GPM (%)57.054.52.5 ppt
Net profit16210455.8%
NPM (%)20.317.52.8 ppt
  • November operation updates. The power generation of the company and its subsidiaries on a consolidated basis grew by 48.1% YoY to 1,658.2 GWh. Power generation of PRC wind and solar projects grew by 67.0% and 12.9% YoY respectively. Power generation of PRC cogen and gas-fired dropped by 7.7% YoY. Power generation of PRC hydro projects increased by 15.8% YoY and power generation of Korea projects increased by 45.2% YoY. 
  • Opportunities from the energy crisis in China. The skyrocketing coal prices this year caused China power shortage from 2Q21 to 3Q21 as coal-fired power is the dominant source of electricity supply. Authorities have increasingly realized the importance of balancing the energy consumption structure. Meanwhile, China has set the carbon-neutrality goal last year, complying with the global climate advocations. Hence, China has a long way to go for the clean energy deployment. Wind and solar are the two main alternative energy supplies that China is aggressively promoting to develop.      
  • Consensus estimates per the 12-month target price is at HK$7.67. EPS is forecasted to grow at 40.7%/13.5%/18.8% for FY2021/22/23F, which would bring forward P/Es down to 18.6x/16.4x/13.4x FY2021/22/23F.