年报前瞻 中广核新能源 (1811:HK) Renewable Energy Company. Bringing China to the World

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1 本研究报告仅通过邮件提供给方正富邦基金方正富邦基金管理有限公司 使用 1 SWS Co. Ltd is a subsidiary of Shenwan Hongyuan Securities. 99 East Nanjing Road, Shanghai Renewable Energy Company Bringing China to the World 2016 年 2 月 18 日 买入 维持 Market Data: 17 Feb Closing Price (HK$) 1.09 Price Target (HK$) 1.66 HSCEI 7928 HSCCI week High/Low (HK$) 3.6/0.98 Market Cap (USD Mn) 603 Market Cap (HK$ Mn) 4677 Shares Outstanding (Mn) 4,291 Exchange Rate (HK$-US$) 7.75 Price Performance Chart: Source: Bloomberg Analyst Vincent Yu, CFA A BAM599 yuwj@swsresearch.com (+86) Contact Mae Huang (8621) huangqian@swsresearch.com Related Reports " CGN MEIYA POWER HOLDINGS (1811:HK) Running out of puff " 11 December 2015 The company does not hold any equities or derivatives of the listed company mentioned in this report ( target ), but then we shall provide financial advisory services subject to the relevant laws and regulations. Any affiliates of the company may hold equities of the target, which may exceed 1 percent of issued shares subject to the relevant laws and regulations. The company may also provide investment banking services to the target. The Company fulfills its duty of disclosure within its sphere of knowledge. The clients may contact compliance@swsresearch.com for relevant disclosure materials or log into under disclosure column for further information. The clients shall have a comprehensive understanding of the disclosure and disclaimer upon the last page. 年报前瞻 中广核新能源 (1811:HK) Financial summary and valuation E 2016E 2017E Revenue (US$m) 1,055 1,380 1,421 1,516 1,804 YoY (%) Net income (US$m) YoY (%) (46.4) EPS (US$) Diluted EPS (US$) ROE (%) Debt/asset (%) Dividend Yield (%) PE (x) PB (x) EV/Ebitda (x) Note: Diluted EPS is calculated as if all outstanding convertible securities, such as convertible preferred shares, convertible debentures, stock options and warrants, were exercised. 我们预计中广核新能源 15 年将实现 1.08 亿美元的盈利, 与彭博预期一致 第一批资产的 利润从 2015 年 9 月开始计入, 由于 2015 年对风能和太阳能业务的敞口较小, 突发限电 恶化对中广核 15 年的收入没有太大影响 但限电将持续影响 2016 年, 再加上美元升值 的压力, 我们将公司 16 年预期利润从 1.31 亿美元调低至 1.14 亿美元, 基于 2016 年底 第二批注入在年底完成的假设 第二轮资产注入方式悬而未决 我们调研了解到中广核集团拥有大概 7.3GW 的在运营风 能, 约 2.1GW 的在建风能, 约 3.0GW 的获批准项目,600MW 左右的太阳能资产和多 达 1.4GW 的水电 充足的注入储备资产使中广核新能源未来 3-4 年不会受电价下调带来 的直接影响, 但是公司目前的估值阻碍了它继续注入资产的战略 公司仍有许多选择, 如 管理层对用韩国的资产交换 16 年的注入资产有所考虑, 对通过继续贷款的方式或其他可 能途径也持开放态度 我们的模型中则假设公司在一年内待市场恢复其 1x PB 后进行增发 筹集 30% 的资金来收购第二批资产 管理层计划今年注入更高质量及更多数量的资产 我们维持 16 年注入 1.2GW 风能 250MW 氢能和 200MW 太阳能的预期不变 外汇压力 16 年预计利润下调部分源于我们调整了汇率假设 申万研究宏观分析师预计 人民币对美元 16 年底将贬值到 6.8 公司现有约 50% 的债务以美元计价, 约 1/3 的债务 以韩元计价, 暂时无对冲仓位 随着多轮降息继续, 我们预计公司将增加更多人民币贷款 并减少美元债务来减缓外汇压力 管理层考虑赎回优先于对冲策略 维持买入评级 我们将 15 年的预计每股收益由 美元调整为 美元 ( 同比下降 58%), 16 年 美元 ( 同比上升 6%) 的预测维持不变,17 年的则由 美元调 整为 美元 ( 同比上升 25%) 我们的预测和评级包含了对第二轮注资资产的成功性, 但我们同时将目标价格从 2.12 港币调低至 1.66 港币, 以反映该交易的暂时不确定性, 和 可再生能源板块至少半年的低迷市场情绪以及公司短期内强劲催化剂的缺失 我们的目标 价格对应 15 年 15 倍的市盈率和 1.12 倍的市净率,16 年则分别是 16 倍和 0.8 倍 基于 52% 的上涨幅度, 我们维持买入评级

2 本研究报告仅通过邮件提供给方正富邦基金方正富邦基金管理有限公司 使用 2 SWS Co. Ltd is a subsidiary of Shenwan Hongyuan Securities. 99 East Nanjing Road, Shanghai Renewable Energy Company Bringing China to the World Investment Highlights: We raise our 15E net profit forecast for CGN New Energy from US$104.5m to US$108m (-46.4% YoY), to reflect earlier-than-expected contribution from renewable energy assets acquired from its parent CGN Group. Further injections of assets will boost the company s outlook but overhangs from US dollar appreciation, curtailment issues and expectation of year-end injection may impact profitability in Complicating factors. The company disclosed that it consolidated injected wind and solar assets from September 2015, compared with our previous assumptions that contribution from the new assets would be limited to 4Q15. Although the late-in-the-year inclusion of the assets limited CGN s exposure to wind and solar curtailment in 15E, we expect curtailment problems to persist in 16E. Pending ways for second-batch. According to our most recent checks, CGN Group operates c.7.3gw of wind power, with c.2.1gw under construction, and c.3.0gw in approved pipeline projects. Solar assets amounts to c.600mw and hydropower up to 1.4GW. The injection of existing assets will help insulate CGN New Energy from the risk of wind and solar tariff cuts for the next three to four years. However, the company s current low valuation may impede its ability to finance further acquisitions, a key component of its growth strategy. Swap Korea assets for 16E injection is under consideration of the management. Company also open to further loans and other possible methods. We view the company to raise 30% of capital demand from the market when valuation likely to recover to over 1x book value within a year to avoid dilution. We maintain our assumption of 1.2GW of wind assets, 250MW hydro and 200MW solar assets to be injected in Forex pressure. SWSs macro analysts forecast the renminbi may depreciate Rmb6.8:US$1 in CGN New Energy has c.50% of its debt denominated in US dollars, c.33% in Korean won, with no currency hedging in place. We expect the company to raise the proportion of borrowing denominated in renminbi and to reduce its US dollar debt, with management indicating that loan redemption is a higher priority than hedging. Maintain BUY. To factor in the risk of curtailment as well as the strengthening US dollar we lower our 16E profit forecast from US$131m to US$114m, while our expectation of further asset injections at end-2016 leads us to raise our 17E forecast from Rmb168.1m to Rmb1.78m. We revise up our 15E EPS forecast from US$0.024 to US$0.025 in 15E (-58% YoY), maintain our forecast of US$0.027 in 16E (+6% YoY) and revise up our forecast from US$0.032 to US$0.033 in 17E (+25% YoY). However, with market sentiment weak and the lack of strong additional catalysts, we lower our target price from HK$2.12 to HK$1.66, representing 8.5x 15E PE, 1.12x 15E PB, or 8x 16E PE, 0.8x 16E PB. With 52% upside, we maintain our BUY rating.

3 本研究报告仅通过邮件提供给方正富邦基金方正富邦基金管理有限公司 使用 3 Figure 1 Asset available for injection at CGN Group Approx. Wind Projects in operation (GW) 7.3 Projects in construction (GW) 2.1 Projects approved but not started construction yet (GW) 3.0 Solar Projects in operation (MW) 600 Hydro Projects in operation (GW) 1.4 Source: Company, SWS Figure 2 FDebt approx. structure by currency RMBdenominated 17% KRWdenominated 33% USDdenominated 50% Source: Company, SWS Figure 3 Figure 4 PE band for CGN New Energy (1811 HK) PB band for CGN New Energy (1811 HK) Average+1st.dev=2.09x 15 Average+1st.dev=14x 1.50 Average=1.64x 10 Average=7.9x 1.00 Average-1st.dev=1.19x 5 0 Average-1st.dev= 1.6x Source: SWS Historical PE Average PE Historical PB Average+std Source: SWS Average PB Average-std Please refer to the last page for important disclosures Page 1

4 本研究报告仅通过邮件提供给方正富邦基金方正富邦基金管理有限公司 使用 4 Appendix Consolidated Income Statement US$m E 2016E 2017E Revenue 1,055 1,380 1,421 1,516 1,804 Cost of Sales Gross Profit Other Income C Respair and maintenance expense o nstaff costs sebitda oebit l Finance Costs i Profit before tax d aincome tax expense tminority interests eprofit for the year Source: d SWS Cash Flow Statement US$m E 2016E 2017E Profit before taxation Plus:Depr. and amortisation Finance cost Losses from investments Change in working capital Others CF from operating activities CAPEX Other CF from investing activities CF from investing activities ,031-1,075-1,072 Equity financing Net change in liabilities Dividend and interest paid Other CF from financing activities CF from financing activities Net cash flow Source:SWS Please refer to the last page for important disclosures Page 2

5 本研究报告仅通过邮件提供给方正富邦基金方正富邦基金管理有限公司 使用 5 Consolidated Balance Sheet US$m E 2016E 2017E Current Assets Bank balances and cash Trade and other receivables Inventories Other current assets Long-term investment PP&E 1,681 1,483 3,520 5,787 7,854 Intangible and other assets Total Assets 2,958 2,487 4,730 6,883 9,077 Current Liabilities Borrowings Trade and other payables Other current liabilities Long-term liabilities 1,766 1,225 3,299 5,060 6,787 Total Liabilities 2,020 1,671 3,805 5,679 7,552 Minority Interests Shareholder Equity ,064 1,365 Share Capital Reserves ,051 Equity attributable ,064 1,365 Total Liabilities and equity 2,958 2,487 4,730 6,883 9,077 Source: SWS Key Financial Ratios Ratios per share (US$) E 2016E 2017E Earnings per share Diluted earnings per share Operating CF per share Dividend per share 0.01 special Net assets per share Key Operating Ratios (%) ROIC ROE Gross profit margin Ebitda margin Ebit margin Growth rate of Revenue(YoY) Growth rate of Profit(YoY) (46.4) Debt-to-asset ratio Turnover rate of net assets Turnover rate of total assets Effective tax rate (%) Dividend yield (%) Valuation Ratios (x) P/E P/B EV/Sale EV/Ebitda Source: SWS Please refer to the last page for important disclosures Page 3

6 本研究报告仅通过邮件提供给方正富邦基金方正富邦基金管理有限公司 使用 6 Information Disclosure: The views expressed in this report accurately reflect the personal views of the analyst. The analyst declares that neither he/she nor his/her associate serves as an officer of nor has any financial interests in relation to the listed corporation reviewed by the analyst. None of the listed corporations reviewed or any third party has provided or agreed to provide any compensation or other benefits in connection with this report to any of the analyst, the Company or the group company(ies). 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7 本研究报告仅通过邮件提供给方正富邦基金方正富邦基金管理有限公司 使用 7 The Company possesses all copyrights of this report which shall be treated as non-public information. The Company reserves all rights related to this report. Unless otherwise indicated in writing, all the copyrights of all the materials herein belong to the Company. In the absence of any prior authorization by the Company in writing, no part of this report shall be copied, photocopied, replicated or redistributed to any other person in any form by any means, or be used in any other ways which will infringe upon the copyrights of the Company. All the trademarks, service marks and marks used herein are trademarks, service marks or marks of the Company, and no one shall have the right to use them at any circumstances without the prior consent of the Company. This report may be translated into different languages. The Company does not warrant that the translations are free from errors or discrepancies. This report is for distribution in Hong Kong only to persons who fall within the definition of professional investors whether under the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong) (the SFO ) or the Securities and Futures (Professional Investor) Rules (Chapter 571D of the laws of the Hong Kong under the SFO). This report is for distribution in the United Kingdom only to persons who (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) order 2001 (as amended) (the Order ) or (ii) are persons falling within Article 49(2)(a) to (d) ( High Net Worth Companies, Unincorporated Associations, etc ) of the Order (All such persons together being referred to as Relevant Persons ). This document is directed only at Relevant Persons. Other Persons who are not Relevant Persons must not act or rely upon this document or any of its contents. Distribution in Singapore If distributed in Singapore, this report is meant only for Accredited Investors and Institutional Investors as defined under Section 4A of the Securities and Futures Act of Singapore. If you are not an Accredited Investor or an Institutional Investor, you shall ignore the report and its contents. The Singapore recipients of the report are to contact the Singapore office of Shenwan Hongyuan Singapore Private Limited at , or in respect of any matters arising from, or in connection with, the report. Please refer to the last page for important disclosures Page 5