CGN Power 1816

Re: CGN Power 1816

Postby winston » Wed Feb 15, 2017 11:14 am

not vested

Buy This Nuclear Power Generator In China: Deutsche

By Shuli Ren

CGN Power has lost a third of its market value since its IPO in December 2014 and is now trading at near its historical low, as investors worry that its profit margins would suffer from China’s nuclear power market reform.

Nuclear power plants in China started to supply electricity directly to end users last year.

According to CGN Power, the electricity that it sold under the new “direct power supply” scheme constituted 5% of its total output.

CGN Power is trading at only 11 times forward earnings, against a 16% earnings growth in the next three years, estimates Deutsche. (see chart) And the 16% earnings growth is not an ambitious estimate, because most of it (13%) comes from capacity growth at CGN.

Deutsche uses sum-of-the-parts analysis and now has a price target of 2.70 Hong Kong dollars for CGN. CGN was trading at HK$2.45 recently.

Source: Barron's Asia ... -deutsche/
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