[ET Net News Agency, 29 October 2019] HSBC Global Research lowered its target price for
China Longyuan Power (00916) to HK$5.5 from HK$6 and maintained its "buy" rating.
The research house said China Longyuan's 9-month net profit of RMB3.5bn (-13%) accounts
for 83% of HSBC's estimate for FY2019.
Direct power sales (DPS) accounted for 29.1% of the total volume in slightly better
tariff discounts compared to last year. Management previously guided the DPS mix at 28.5%
for 2019 (2018: 25.5%) and at a similar tariff discount.
The company also slightly lowered guidance on new capacity additions to 1.1-1.3GW of new
wind power capacity in 2019 (earlier: 1.2-1.5GW). For 2020, management targets 2GW of new
wind power capacity which had started construction with equipment already secured.
HSBC cut its earnings forecasts by 4-8% factoring in the latest guidance. (KL)