Stock Analysis & Valuation China Datang Corporation Renewable Power Co., Limited (1798.HK)

• Previous Close: HK$2.09
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, HK$	Upside, %
Artificial intelligence (AI)	19.00	809
Intrinsic value (DCF)	1.91	-9
Graham-Dodd Method	4.10	96
Graham Formula	2.30	10

Strategic Investment Analysis

Company Overview

China Datang Corporation Renewable Power Co., Limited (1798.HK) is a leading renewable energy producer in China, specializing in wind power generation and other clean energy sources. As a subsidiary of state-owned China Datang Corporation Ltd., the company operates with significant scale, boasting 13,078 MW of consolidated installed capacity as of December 2021, with wind power comprising 11,998 MW and photovoltaic contributing 1,075 MW. The company's comprehensive business model encompasses development, investment, construction, and management of renewable energy projects across wind, solar, hydro, and biomass power generation. Headquartered in Beijing, China Datang Renewable Power leverages its state-backed position to secure large-scale projects and benefit from China's aggressive renewable energy transition policies. The company also engages in equipment research, maintenance services, and international power project development, positioning itself as an integrated renewable energy solutions provider in the world's largest clean energy market.

Investment Summary

China Datang Renewable Power presents a mixed investment case with both compelling opportunities and significant risks. The company benefits from China's massive renewable energy expansion targets and state-backed project security, generating stable revenue from its substantial 13+ GW installed capacity. With HKD 2.38 billion net income and strong operating cash flow of HKD 6.29 billion, the company demonstrates operational profitability. However, investors should note the substantial debt burden of HKD 68.4 billion and aggressive capital expenditures of HKD -13.68 billion, indicating ongoing heavy investment requirements. The low beta of 0.258 suggests defensive characteristics, but the high leverage and capital-intensive nature of the business create financial risk. The renewable energy transition tailwinds are strong, but execution risk and funding requirements remain substantial concerns.

Competitive Analysis

China Datang Renewable Power competes in China's rapidly expanding renewable utilities sector with several distinct advantages. As a subsidiary of state-owned China Datang Corporation, the company benefits from preferential access to project approvals, financing, and grid connections that private competitors cannot match. Its scale at over 13 GW installed capacity provides operational efficiencies and bargaining power with equipment suppliers. The company's diversified renewable portfolio across wind, solar, and other sources reduces technology-specific risks and allows for optimal resource allocation. However, competition in China's renewable sector is intense, with multiple state-owned enterprises and increasingly capable private companies vying for market share. The company's high debt levels compared to some competitors may constrain future investment flexibility. Its focus primarily on wind power, while substantial, may leave it relatively underexposed to solar's faster growth trajectory in China. The state-backing provides stability but may also limit operational agility compared to more nimble private competitors. The company's extensive experience in project development and maintenance services creates additional revenue streams that pure power generators lack.

Major Competitors

• China Suntien Green Energy Corporation Limited (0956.HK): China Suntien focuses on wind power, solar power, and natural gas distribution with strong regional presence in Hebei province. While smaller in scale than Datang Renewable, Suntien benefits from integrated natural gas operations that provide revenue diversification. However, its geographic concentration creates higher regional policy risk compared to Datang's national footprint.
• Xinyi Energy Holdings Limited (0868.HK): Xinyi Energy operates solar farms with a focus on the solar glass value chain integration. The company benefits from vertical integration with its parent's solar glass manufacturing, providing cost advantages. However, its smaller scale and solar-only focus make it more vulnerable to technology-specific policy changes compared to Datang's diversified renewable portfolio.
• China National Nuclear Power Co., Ltd. (1811.HK): As a nuclear power-focused utility, CNNP operates in a different but complementary clean energy segment. The company benefits from extremely stable baseload power generation and strong government support for nuclear expansion. However, nuclear's higher regulatory barriers and public acceptance issues create different risk profiles compared to Datang's renewable focus.
• 0002.HK (CLP Holdings Limited): CLP Holdings is a diversified energy company with significant renewable investments across multiple Asian markets. The company brings international experience and sophisticated risk management capabilities. However, its smaller renewable portfolio in mainland China and higher exposure to regulated markets may limit growth compared to Datang's focused China renewable strategy.
• 0916.HK (Longyuan Power): China Longyuan Power Group Corporation is one of China's largest wind power producers with even greater scale than Datang Renewable. The company benefits from first-mover advantage and extensive operational experience. However, its heavier reliance on wind power compared to Datang's more diversified renewable mix creates different risk exposure in China's evolving energy market.