CHINA RES POWER(00836) 华泰证券·2024-10-24 01:03Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 29.95 [6][7]. Core Views - The company plans to issue 198.5 million new shares to alleviate funding pressure, which will increase the total share capital by 7.62% [3]. - The issuance price is set at HKD 19.70 per share, representing a discount of approximately 5.06% compared to the latest closing price [3]. - The net proceeds from the fundraising are expected to be HKD 71.97 billion, aimed at increasing cash reserves, supporting operations, and repaying financial liabilities [3]. - The company’s debt-to-asset ratio as of 1H24 stands at 68.1%, an increase of 8.9 percentage points since the end of 2020 [5]. - The company has achieved 33.56% of its renewable energy development target for the "14th Five-Year Plan" with a total installed capacity of 24.66 million kilowatts as of 1H24 [5]. Summary by Sections Financial Projections - The forecasted net profit attributable to the parent company for 2024-2026 is projected at HKD 14.99 billion, HKD 16.61 billion, and HKD 19.46 billion respectively, reflecting growth rates of 36.21%, 10.84%, and 17.12% [9][14]. - The expected earnings per share (EPS) for the same period is projected to be HKD 3.12, HKD 3.45, and HKD 4.04 [9][14]. Valuation Metrics - The report assigns a price-to-book (PB) ratio of 0.85 for thermal power and 17.5 for renewable energy, reflecting a premium due to the company's superior profitability in these sectors [6][12]. - The target market capitalization is estimated at HKD 144.1 billion, with a target price of HKD 29.95, which does not yet account for the potential increase in total share capital from the new issuance [6][12]. Shareholder Structure - Following the completion of the share issuance, the public shareholders' stake in the company will increase from 37.06% to 39.55% [4]. - The combined stake of China Resources Group and its concert parties will decrease to 61.73% post-issuance [4]. Market Context - The report highlights the ongoing challenges in the renewable energy sector, particularly the delay in the planned spin-off of the renewable energy platform for A-share listing, which is crucial for funding the company's ambitious growth targets [5]. - The company’s stock has shown a 52-week price range of HKD 14.00 to HKD 25.45, indicating significant volatility [8].