Hua Yuan Zheng Quan·2024-07-26 06:01Investment Rating - The report upgrades the investment rating of Longyuan Power (0916.HK) to "Buy" [4] Core Views - The report highlights the recent increase in shareholding by a state-owned insurance company, which signifies a deep recognition of the company's value and aligns with national dual carbon strategy [4] - Longyuan Power is positioned as a key player in the renewable energy sector, with significant growth plans and backing from the State Energy Group [5] - The report emphasizes the potential for long-term investment in the renewable energy sector, supported by favorable government policies and market conditions [5] Summary by Sections Shareholding and Market Recognition - On July 22, 2024, Ruizhong Life Insurance increased its stake in Longyuan Power by acquiring 5.26 million shares at HKD 7.45 per share, totaling approximately HKD 39.19 million, bringing its total holdings to about 166 million shares, or 5% of the company [4] Growth Plans and Financial Projections - Longyuan Power, as part of the State Energy Group's renewable energy platform, has a plan to add 30GW of new energy capacity during the 14th Five-Year Plan, with a commitment of 21GW from the group [5] - The company’s net profit forecasts for 2024-2026 are projected at RMB 6.73 billion, RMB 7.44 billion, and RMB 8.09 billion respectively, with current price-to-earnings ratios of 8, 7, and 7 times [5][6] Industry Context and Policy Support - The report notes that the renewable energy sector is currently facing challenges, but the long-term outlook remains positive due to the government's firm commitment to the dual carbon strategy and supportive policies [5] - The report suggests that the influx of long-term capital from insurance companies could significantly impact the stock market, particularly for renewable energy assets [4][5]