| Valuation method | Value, HK$ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 12.80 | 80 |
| Intrinsic value (DCF) | 4.81 | -32 |
| Graham-Dodd Method | 2.90 | -59 |
| Graham Formula | 5.50 | -23 |
China Longyuan Power Group Corporation Limited (0916.HK) is China's leading renewable energy producer and one of the world's largest wind power operators. Headquartered in Beijing and listed on the Hong Kong Stock Exchange, the company develops, constructs, and operates wind power plants across China while maintaining a complementary coal power segment. As a subsidiary of state-owned China Energy Investment Corporation, Longyuan Power benefits from strong government backing in China's ambitious renewable energy transition. The company's diversified portfolio includes thermal, solar, tidal, biomass, and geothermal power generation, positioning it at the forefront of China's clean energy transformation. With operations spanning power equipment manufacturing, coal trading, and comprehensive maintenance services, Longyuan Power plays a critical role in China's energy security and carbon neutrality goals. The company's extensive experience since its 1993 founding makes it a key player in Asia's renewable utilities sector.
China Longyuan Power presents a compelling investment case as China's dominant wind power operator with stable government backing, though it faces significant capital expenditure requirements and debt levels. The company's 0.59 beta indicates lower volatility than the broader market, while its HKD 0.249 dividend provides income appeal. With HKD 37.07 billion in revenue and HKD 6.35 billion net income, the company demonstrates operational scale in China's growing renewable sector. However, negative capital expenditures of HKD 26.86 billion highlight substantial ongoing investment needs, supported by HKD 17.06 billion in operating cash flow but constrained by HKD 125.44 billion total debt. The company's position as a state-owned enterprise provides project security but may limit operational flexibility. Investors should monitor China's renewable policy support, electricity pricing mechanisms, and the company's ability to manage its debt load while expanding capacity.
China Longyuan Power maintains a dominant competitive position as China's largest wind power producer, benefiting from first-mover advantage, extensive operational experience since 1993, and strong government connections through its parent company China Energy Investment Corporation. The company's scale provides cost advantages in project development and equipment procurement, while its diversified energy portfolio across wind, coal, and emerging renewables offers revenue stability. However, Longyuan faces intensifying competition from other state-owned power giants and increasingly cost-competitive private renewable developers. The company's competitive advantages include its extensive wind resource portfolio, operational expertise in managing large-scale wind farms, and integrated service capabilities including equipment manufacturing and maintenance. Its primary weaknesses include high leverage levels limiting financial flexibility and exposure to regulatory changes in feed-in tariffs. The company's coal power segment provides base load capacity but faces environmental transition risks as China accelerates its decarbonization agenda. Longyuan's future positioning depends on its ability to efficiently transition toward newer renewable technologies while managing its existing asset base and debt structure.