| Valuation method | Value, HK$ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 31.75 | 78 |
| Intrinsic value (DCF) | 13.52 | -24 |
| Graham-Dodd Method | 13.28 | -25 |
| Graham Formula | 29.22 | 64 |
China Resources Power Holdings Company Limited (0836.HK) is a leading independent power producer in China with a diversified energy portfolio spanning thermal and renewable power generation. Headquartered in Hong Kong and operating as a subsidiary of CRH (Power) Limited, the company develops, operates, and manages power plants and coal mines across mainland China. With an impressive operational capacity of nearly 48,000 MW as of 2021, China Resources Power maintains a balanced mix of 37 coal-fired plants, 141 wind farms, 31 photovoltaic facilities, and additional hydroelectric and gas-fired plants. The company's integrated business model encompasses coal mining, power distribution, intelligent energy solutions, and combined heat and power projects, positioning it as a comprehensive energy provider in China's rapidly evolving utilities sector. As China accelerates its energy transition toward carbon neutrality, China Resources Power's growing renewable energy segment provides strategic positioning in the world's largest electricity market while maintaining stable cash flows from its established thermal power operations.
China Resources Power presents a mixed investment case with both attractive fundamentals and significant transition risks. The company's scale and diversified energy portfolio provide revenue stability, with HKD 105.3 billion in revenue and HKD 14.4 billion net income demonstrating operational efficiency. The 0.61 beta indicates defensive characteristics relative to the broader market, while a HKD 1.047 dividend per share offers income appeal. However, substantial total debt of HKD 194.2 billion against HKD 5.8 billion cash creates leverage concerns, particularly as China's energy transition may pressure coal-fired assets. The company's strategic pivot toward renewables (36% of capacity from wind, solar, and hydro) positions it for long-term sustainability, but execution risk and capital expenditure requirements (HKD -49.7 billion in capex) remain elevated. Investors must weigh the company's entrenched market position against regulatory uncertainties and China's decarbonization timeline.
China Resources Power maintains a strong competitive position within China's independent power producer sector through its scale, diversified generation mix, and vertical integration. The company's nearly 48,000 MW operational capacity places it among China's top power producers, providing economies of scale in procurement and operations. Its unique coal-electricity integration strategy, combining coal mining with power generation, offers cost advantages and supply security for its thermal operations. The growing renewable portfolio (141 wind farms and 31 photovoltaic plants) demonstrates strategic positioning for China's energy transition, though it still trails specialized renewable pure-plays in clean energy concentration. The company's subsidiary status under state-backed CRH provides political connections and financing advantages but may also introduce governance complexities. Geographic diversification across China's regions reduces regulatory and demand risks, while its integrated business model spanning generation, distribution, and energy services creates multiple revenue streams. However, competition is intensifying from both state-owned giants like China Energy Investment and agile renewable specialists, while environmental regulations increasingly pressure thermal assets. The company's challenge lies in balancing its legacy thermal operations with renewable growth while managing substantial debt loads.