Power Impulse Summary
Key Highlights
- HK utilities was the best performing sector, up 0.7% WoW (Week-over-Week) from 22 Jul to 29 Jul.
- Nuclear was the worst performer, down 6.8% WoW.
- Spot polysilicon price fell 0.52% WoW to USD15.26/kg, while spot solar wafer price rose 0.12% WoW to USD0.809/piece.
- Qinhuangdao spot coal price (5,500 kcal/kg, Shanxi Premium Blended) increased 0.1% WoW to CNY394.6/tonne.
Market News
Wind Power Generation in Inner Mongolia
- Wind power generation in Inner Mongolia increased by 75 hours YoY in 1H15.
- The improvement is attributed to electricity exports to other provinces and wind power for heating.
- Four ultra-high voltage cables are planned to connect Inner Mongolia to other provinces, expected to be commissioned in 2017.
- Datang Renewable (1798 HK), with ~44% of capacity in Inner Mongolia, may benefit from the improved utilization rate.
France's Nuclear Power Reduction
- France plans to reduce 25% of nuclear power generation by 2025.
- Currently, 75% of power is generated from nuclear.
- This reduction could ease competition for Chinese nuclear exports, benefiting nuclear equipment makers like Shanghai Electric (2727 HK) and nuclear plant operators like CGN Power (1816 HK).
Data Updates
Power Generation
- Total power generation in June was 474,500 GWh, up 4.0% MoM.
- Wind power generation was 15,100 GWh, down 20.2% MoM but up 49.9% YoY.
- Thermal power generation was 336,300 GWh, down 2.4% MoM and 5.8% YoY.
- Hydro power generation was 102,800 GWh, up 34.0% MoM and 16.4% YoY.
Coal
- Coal spot price on 27 Jul was CNY395/tonne, up 0.1% WoW and down 24.8% YoY.
- Coal inventory on 30 Jun was 22 days, up 1 day WoW.
Solar
- Polysilicon price on 29 Jul was USD15.26/kg, down 0.5% WoW and 27.2% YoY.
- Solar wafer price on 29 Jul was USD0.809/piece, up 0.1% WoW and down 5.2% YoY.
Stock Price Performance
Chinese IPPs
| Company |
1D% |
5D% |
1M% |
3M% |
6M% |
YTD% |
| Huaneng Power |
+1.0% |
-5.0% |
-12.1% |
-13.5% |
-2.2% |
-8.7% |
| Datang Power |
+0.4% |
+0.7% |
-12.8% |
-24.8% |
-6.6% |
-22.8% |
| Huadian Power |
+0.4% |
-6.7% |
-22.4% |
-31.8% |
-3.2% |
-22.8% |
| China Power International |
+0.6% |
-6.2% |
-7.4% |
6.7% |
14.8% |
34.6% |
Nuclear Power
| Company |
1D% |
5D% |
1M% |
3M% |
6M% |
YTD% |
| CGN Power |
+1.5% |
-6.8% |
-13.8% |
-22.5% |
+4.9% |
+2.4% |
City Gas Distributors
| Company |
1D% |
5D% |
1M% |
3M% |
6M% |
YTD% |
| HK & China Gas |
-0.0% |
-3.6% |
-3.5% |
-17.5% |
+0.6% |
-2.8% |
| China Gas |
+1.5% |
-3.4% |
-0.2% |
-10.9% |
2.0% |
2.0% |
| China Resources Gas |
+1.0% |
-1.3% |
1.6% |
-18.9% |
15.0% |
7.9% |
| ENN Energy |
+1.0% |
-1.3% |
1.4% |
-10.3% |
1.4% |
8.0% |
| Towngas China |
+1.0% |
-1.6% |
-5.6% |
-22.0% |
-0.7% |
-14.5% |
HK Power Utilities
| Company |
1D% |
5D% |
1M% |
3M% |
6M% |
YTD% |
| CLP |
-0.4% |
-0.2% |
+0.5% |
-4.5% |
-5.9% |
-2.8% |
| Power Assets |
+1.3% |
+0.4% |
+0.8% |
-10.1% |
-13.9% |
-5.9% |
| CKI |
+0.6% |
+3.0% |
+9.7% |
+4.1% |
+14.8% |
+2.9% |
| HKE Trust |
-0.4% |
-0.4% |
+1.5% |
+3.1% |
+5.3% |
+2.9% |
Solar Power
| Company |
1D% |
5D% |
1M% |
3M% |
6M% |
YTD% |
| GCL-Poly |
+1.2% |
-6.8% |
-3.0% |
-29.9% |
-3.0% |
-8.9% |
| Xinyi Solar |
+8.8% |
+0.3% |
+13.2% |
+19.6% |
+54.4% |
+56.5% |
| GCL New Energy |
+3.7% |
-5.1% |
-17.6% |
-48.6% |
-37.8% |
-30.0% |
| Singyes Solar |
+7.2% |
-9.1% |
-17.4% |
-38.3% |
-28.6% |
-26.8% |
| United PV |
+2.3% |
-9.2% |
-23.3% |
-25.2% |
+6.3% |
+22.9% |
| Comtec Solar |
+1.4% |
-8.4% |
-28.7% |
-26.3% |
-10.3% |
-15.5% |
Wind Power
| Company |
1D% |
5D% |
1M% |
3M% |
6M% |
YTD% |
| Longyuan Power |
+2.4% |
-1.5% |
+5.1% |
-11.0% |
+5.1% |
+9.3% |
| Huaneng Renewables |
+2.9% |
-1.5% |
+2.2% |
-3.6% |
+15.1% |
+27.5% |
| Datang Renewable |
+3.0% |
-9.7% |
-14.3% |
-21.5% |
-7.3% |
-1.0% |
| Beijing Jingneng Clean Energy |
+4.7% |
-3.9% |
-18.6% |
-42.2% |
-4.5% |
-5.9% |
| China High Speed Transmission |
+4.1% |
-6.9% |
+0.5% |
-10.8% |
+15.7% |
+31.5% |
| Concord New Energy |
+6.3% |
-3.8% |
-7.3% |
-20.3% |
+6.3% |
+22.9% |
Analyst Note
- Analyst: Ricky WK Ng, CFA
- Contact: (852) 22680689, rickyng@kimeng.com.hk
- YTD share price performance is illustrated in a graph (not included here).
A/H Discount or Premium on Power Sector
| Company Name |
BBG Code (A) |
Px (CNY) |
BBG (H) |
Px (HKD) |
H prem. /disc. to A |
| Huaneng Power |
600011 CH |
10.80 |
902 HK |
9.57 |
-29% |
| Datang Int'l |
601991 CH |
6.59 |
991 HK |
3.22 |
-61% |
| Huadian Power |
600027 CH |
8.65 |
1071 HK |
7.61 |
-30% |
| Shanghai Elect |
601727 CH |
13.79 |
2727 HK |
4.94 |
-71% |
| Dongfang Elect |
600875 CH |
16.79 |
1072 HK |
10.28 |
-51% |
Peer Comparisons
Chinese IPPs
| Company |
Mkt Cap (USDm) |
Closing Price |
Rating |
Target Price |
PER (x) |
P/BV (x) |
DY (%) |
ROE (%) |
| Huaneng Power* |
23,103 |
9.57 |
Hold |
9.50 |
8.0 |
1.4 |
6.2 |
18.3 |
| China Resources Power* |
12,001 |
19.38 |
Buy |
25.00 |
7.5 |
1.2 |
4.6 |
16.1 |
| Datang Power* |
11,984 |
3.22 |
Hold |
4.50 |
8.1 |
0.8 |
5.8 |
8.6 |
| Huadian Power* |
11,563 |
7.61 |
Hold |
8.80 |
8.3 |
1.4 |
4.5 |
18.0 |
| China Power International* |
4,988 |
5.29 |
Buy |
4.60 |
9.0 |
1.3 |
4.5 |
13.7 |
| Average |
- |
- |
- |
- |
8.2 |
1.2 |
5.1 |
14.9 |
Nuclear Power
| Company |
Mkt Cap (USDm) |
Closing Price |
Rating |
Target Price |
PER (x) |
P/BV (x) |
DY (%) |
ROE (%) |
| CGN Power* |
20,230 |
3.45 |
Buy |
4.00 |
19.7 |
2.2 |
1.6 |
11.5 |
| Average |
- |
- |
- |
- |
16.7 |
2.4 |
1.8 |
14.5 |
HK Power Utilities
| Company |
Mkt Cap (USDm) |
Closing Price |
Rating |
Target Price |
PER (x) |
P/BV (x) |
DY (%) |
ROE (%) |
| CLP |
21,318 |
65.40 |
NR |
NR |
15.3 |
1.8 |
4.1 |
11.8 |
| Power Assets* |
19,496 |
70.80 |
Buy |
87.00 |
19.2 |
1.2 |
3.8 |
6.2 |
| CKI* |
21,423 |
65.90 |
Buy |
75.00 |
15.9 |
1.6 |
3.3 |
10.1 |
| HKE Trust |
6,145 |
5.39 |
NR |
NR |
14.3 |
1.0 |
7.3 |
6.7 |
| Average |
- |
- |
- |
- |
16.2 |
1.4 |
4.7 |
8.7 |
Solar Power
| Company |
Mkt Cap (USDm) |
Closing Price |
Rating |
Target Price |
PER (x) |
P/BV (x) |
DY (%) |
ROE (%) |
| GCL-Poly* |
3,278 |
1.64 |
Buy |
2.80 |
10.6 |
1.2 |
0.6 |
11.7 |
| Xinyi Solar* |
2,844 |
3.35 |
Buy |
3.60 |
17.3 |
4.0 |
2.3 |
28.4 |
| GCL New Energy* |
1,002 |
0.56 |
Buy |
1.60 |
15.1 |
2.1 |
0.0 |
12.3 |
| Singyes Solar* |
705 |
7.85 |
Hold |
12.20 |
5.8 |
1.1 |
1.7 |
21.6 |
| United PV |
544 |
0.89 |
NR |
NR |
11.0 |
0.9 |
N/A |
14.2 |
| Comtec Solar |
156 |
0.87 |
NR |
NR |
10.1 |
0.6 |
2.3 |
4.3 |
| Average |
- |
- |
- |
- |
11.7 |
1.7 |
1.4 |
15.4 |
Wind Power
| Company |
Mkt Cap (USDm) |
Closing Price |
Rating |
Target Price |
PER (x) |
P/BV (x) |
DY (%) |
ROE (%) |
| Longyuan Power* |
9,145 |
8.82 |
Buy |
12.00 |
15.4 |
1.6 |
1.2 |
10.4 |
| Huaneng Renewables* |
4,016 |
3.20 |
Buy |
3.80 |
14.4 |
1.4 |
1.3 |
11.6 |
| Datang Renewable* |
957 |
1.02 |
Hold |
1.10 |
19.0 |
0.6 |
0.7 |
4.6 |
| Average |
- |
- |
- |
- |
12.4 |
1.2 |
1.7 |
10.6 |
Environmental Protection and Water Utilities
| Company |
Mkt Cap (USDm) |
Closing Price |
Rating |
Target Price |
PER (x) |
P/BV (x) |
DY (%) |
ROE (%) |
| China Everbright Int'l |
6,988 |
12.08 |
NR |
NR |
23.1 |
3.0 |
1.1 |
13.8 |
| Guangdong Investment |
8,587 |
10.64 |
NR |
NR |
16.2 |
2.0 |
2.7 |
12.8 |
| Beijing Water Enterprise |
6,477 |
5.76 |
NR |
NR |
22.5 |
2.9 |
1.6 |
13.6 |
| Guodian Science and Technology |
681 |
0.87 |
NR |
NR |
10.7 |
0.4 |
0.7 |
3.6 |
| Tianjin Capital Environment |
2,056 |
4.91 |
NR |
NR |
16.6 |
1.3 |
1.7 |
8.5 |
| CT Environmental |
2,210 |
2.80 |
NR |
NR |
27.2 |
6.0 |
0.6 |
27.1 |
| Average |
- |
- |
- |
- |
19.4 |
2.6 |
1.4 |
13.2 |
Power Equipment
| Company |
Mkt Cap (USDm) |
Closing Price |
Rating |
Target Price |
PER (x) |
P/BV (x) |
DY (%) |
ROE (%) |
| Shanghai Electric |
23,771 |
4.94 |
NR |
NR |
20.4 |
1.4 |
1.6 |
7.1 |
| Dongfang Electric |
5,850 |
10.28 |
NR |
NR |
16.9 |
0.8 |
1.0 |
5.3 |
| Harbin Electric |
899 |
5.06 |
NR |
NR |
84.5 |
0.4 |
0.6 |
2.3 |
| Average |
- |
- |
- |
- |
40.6 |
0.9 |
1.1 |
4.9 |
Conclusion
The report outlines the performance of various sectors in the power and renewables industry, highlighting the positive performance of HK utilities, the decline in nuclear, and the mixed performance of wind and solar. Inner Mongolia's wind generation has seen an increase in utilization hours, which could benefit Datang Renewable. France's plan to reduce nuclear power usage may ease competition for Chinese nuclear exports, benefiting nuclear equipment makers. Solar wafer prices have mildly rebounded, while natural gas consumption has remained weak. The stock price performance and valuation metrics for various companies are detailed, with peer comparisons and discount/premium to A shares. Coal prices and inventory levels are also noted, showing modest increases and stable inventory.
