Download Report

Company Research
Initiating Coverage
China Windpower (182 HK)
China / Environmental & Clean Energy
Shifting from EPC to wind/solar farms
15 October 2014
We believe China Windpower (CWP)’s core EPC business will continue
to benefit from the aggressive expansion of wind/solar power plants
in China backed by favorable renewable energy policies. With rapidly
rising proportions of revenue from wind/solar power generation
going forward, we believe CWP could be re-rated to have a PE
valuation similar to peers. Our target price of HK$0.9 is based on
11.5x 15PE, which is a 10% discount to the average 15PE of its peers
group (12.8x 15PE). We initiate coverage on CWP with a BUY rating.
Solid EPC business to fund investments in wind/solar farms
BUY
Target price
HK$0.90
HK$0.60
Last price (15 Oct 14)
Upside/downside (%)
HSI
Mkt cap (HK$mn/US$mn)
52 week range (HK$)
Avg trading volume daily (US$mn)
Free float (%)
50.0
23140.05
5,368/692
0.30 - 0.80
3.25
45.2%
Source: Bloomberg
Performance
Huadian Fuxin agreed to bring in 3.5GW of wind power EPC projects to the
company during 2014-16. We believe CWP could complete around
550MW/700MW/700MW of EPC projects in FY14/FY15/FY16, with most of the
projects coming from Huadian Fuxin. In addition, cash flow generated annually
from the EPC segment, together with the HK$378mn proceeds from the new share
issuance to Huadian Fuxin, are expected to be able to support CWP to expand the
attributable capacity of its wind and solar power farms in the coming future.
Rapid growth in solar power generation
At the end of 1H14, CWP had an attributable capacity of 154MW in solar power.
The company targets to increase the capacity to around 500MW by the end of this
year. With its expertise in the wind power sector and over 7.5GW of exclusive solar
reserves in the pipeline, we believe the company can ramp up its solar power
business. We forecast CWP would add around 300MW of solar power capacity
annually in FY15 and FY16, lifting the total attributable capacity for solar power to
around 1.1GW by the end of FY16. We expect this could generate a revenue CAGR
of 130% for FY14-16 and account for 20% of total revenue by FY16.
Steadily growing wind power business
With over 9 years of development and operational experience in the wind sector,
we believe the company can continue to expand steadily its wind power business
in the long term. As of 1H14, CWP had over 28GW of exclusive wind reserves in
the pipeline. We forecast CWP would add around 150MW of wind power capacity
annually from FY14-16, lifting the total wind power attributable capacity to around
1GW by the end of FY16. We expect this could generate a revenue CAGR of 28%
for FY14-16 and account for 10% of total revenue (including JV/associates) by FY16.
Plenty of investment opportunities in distributed PV projects
Out of the 3.3GW of solar power installed in China in 1H14, around 1GW were
distributed PV projects. We believe 2H14 could see a boom in new installations
and expect 5-6GW of distributed PV projects to be added in China. CWP should be
a beneficiary from more EPC and/or investment opportunities.
HK$
0.80
0.70
240%
0.60
190%
0.50
140%
0.40
0.30
Oct-13
90%
Jun-14
Price(LHS)
Performance
Absolute (%)
Absolute (US$, %)
Relative to HSI (%)
Source: Bloomberg
Rel. to HSI(RHS)
1M
(13.0)
(13.1)
(8.1)
3M
(3.2)
(3.3)
(1.9)
12M
106.9
106.8
107.7
Company background
China WindPower Group Limited specializes in wind
power electricity generation. The Companys principle
businesses include wind farm investment and
operations, and manufacturing of wind power
equipment. China WindPower also provides wind
power electricity generation services such as feasibility
studies, technological consultation, power plant
design, engineering, procurement and construction.
Source: Bloomberg
Figure 1: Financial Summary
Year to Dec 31 (HK$mn)
Revenue
Operating Profit
Reported Profit
Underlying Profit
Underlying EPS (HKD)
BVPS (HKD)
P/E (x)
Dividend Yield (%)
P/B (x)
ROE (%)
2012A
2013A
2014E
2015E
2016E
1,100
198
40
40
0.00
0.50
132.9
0.0
1.2
0.9
1,883
309
151
151
0.02
0.56
35.5
0.0
1.1
3.2
5,753
641
444
444
0.05
0.59
12.1
0.0
1.0
8.6
7,453
1,131
697
697
0.08
0.65
7.7
0.0
0.9
12.5
8,035
1,443
812
812
0.09
0.71
6.6
0.0
0.8
13.3
Source: Guosen Securities(HK)
See the last page of this report for important disclosures
Raymond Ip
SFC CE No.: AMB348
+852 2899 3142
raymond.ip@guosen.com.hk
1
公司报告
首次覆盖
中国风电
(182 HK)
中国 / 环保和清洁能源
从 EPC 转型至风能及光伏发电场
买入
2014 年 10 月 15 日
我们认为在新能源政策支持下，EPC 业务将继续受惠于中国风能及
太阳能发电厂之积极扩张。我们也相信随着风能及光伏发电收入比
例持续增加，公司之估值可以向上重估于同业看齐。我们对中国风
电首予买入评级，目标价为 0.9 港元。按目标价计算，15 年市盈
率为 11.5 倍，相对同业之 12.8 倍约有 10%之折让。
稳健之 EPC 业务，能持续对风能及光伏发电场之投资提供资金
华电福新同意 2014-16 年提供约 3.5GW 之风电 EPC 项目予公司。我们相信
中国风电可于 14 年/15 年/ 16 年分别完成约 550MW/700MW/700MW 之 EPC
项目，其中大部分项目将由华电福新提供。我们预计每年从 EPC 产生之现
金流，连同发行新股予华电福新之 3.78 亿港元现金，将能够支持公司在
未来持续扩大风能和太阳能发电场之权益装机容量。
HK$0.90
HK$0.60
目标价
收盘价 (15 Oct 14)
Upside/downside (%)
恒生指数
总市值 (HK$/US$mn)
52 周最高/最低 (HK$)
日均成交额 (US$mn)
流通量 (%)
50.0
23140.05
5,368/692
0.30 - 0.80
3.25
45.2%
资料来源: 彭博
股价表现
HK$
0.80
光伏发电快速增长
截至 14 年上半年底，公司拥有 154MW 之太阳能电力权益装机容量。公司
计划于今年年底前增加容量至 500MW。凭借其在风电领域之专业知识，加
上公司之太阳能储量达 7.5GW，我们相信公司之太阳能发电业务将能快速
增长。我们预计中国风电于 15 年及 16 年每年增加约 300MW 之太阳能发电
能力，光伏发电之总权益装机容量将于 16 年底提升至约 1.1GW。我们预
计 14 年-16 年之光伏发电营业收入年复合增长率为 130%，占公司 16 年总
收入约 20%。
0.70
240%
0.60
190%
0.50
140%
0.40
0.30
Oct-13
90%
Jun-14
Price(LHS)
Rel. to HSI(RHS)
风电业务稳步上扬
公司拥有超过 9 年之风电行业运作经验，我们相信公司能长远继续稳步扩
大其风电业务。截至 14 年上半年底，公司之风能储量超过 28GW。我们预
计中国风电之风电装机容量于 14 年至 16 年将每年增加约 150MW，风能发
电之总权益装机容量将于 16 年底提升至约 1.0GW。我们预计 14 年-16 年
之风能发电营业收入年复合增长率为 28%，占公司 16 年总收入约 10%。
股票数据
绝对回报 (%)
绝对回报 (US$, %)
相对 HSI 回报 (%)
资料来源: 彭博
1M
(13.0)
(13.1)
(8.1)
3M
(3.2)
(3.3)
(1.9)
12M
106.9
106.8
107.7
公司簡介
分布式光伏发电项目能提供大量机会
于 14 年上半年，中国完成安装光伏发电装机容量约 3.3GW，其中约 1GW
属于。我们认为于 14 年下半年，分布式光伏发电项目能有爆发式之增长，
预计中国将于期内增加 5-6GW 之分布式光伏项目。中国风电将成为受益者。
中国风电集团有限公司专门从事风力发电。该公司的主要
业务包括投资和经营风力发电场及制造风力发电设备。中
国风电还提供风力发电有关服务，如可行性研究，技术协
商服务，电厂设计，工程，采购和施工。
资料来源: 彭博
Figure 2: 盈利预测
截至 Dec 31
(港元百万)
营业额
经营盈利
净利润
实际盈利
每股实际盈利 (HKD)
每股账面价值 (HKD)
市盈率 (x)
股息率 (%)
市净率 (x)
净资产收益率 (%)
2012A
2013A
2014E
2015E
2016E
1,100
198
40
40
0.00
0.50
132.9
0.0
1.2
0.9
1,883
309
151
151
0.02
0.56
35.5
0.0
1.1
3.2
5,753
641
444
444
0.05
0.59
12.1
0.0
1.0
8.6
7,453
1,131
697
697
0.08
0.65
7.7
0.0
0.9
12.5
8,035
1,443
812
812
0.09
0.71
6.6
0.0
0.8
13.3
叶伟焯
证监会中央编号:AMB348
+852 2899 3142
raymond.ip@guosen.com.hk
资料来源：国信证券(香港)
研究报告仅代表分析员个人观点，请务必阅读正文之后的免责声明。
2
China Windpower (182 HK)
Raymond Ip, +852 2899 3142, raymond.ip@guosen.com.hk
Company profile
CWP specializes in wind and
solar farm investment,
operations, EPC, and O&M.
CWP’s core businesses include wind and solar farm investments, operation and services (early
stage development, design and consultancy, construction, operation and maintenance and new
energy equipment manufacturing). The company has started to commence wind power
investments and operations since 2006, and currently owns and operates 25 wind power plants
with a total attributable capacity of 548MW. CWP has further expanded into solar power since
2010. It currently operates 10 solar power plants with a total attributable capacity of 154MW, and
has 365MW of solar capacity under construction. CWP has set up regional management
organizations in 26 regions, such as Beijing, Liaoning, Jilin, Inner Mongolia, Hebei, Gansu, Hebei,
Shandong, Jiangsu, Zhejiang, Anhui, Guangxi, New York and Hawaii in the US, Ontario in Canada
and Ghana in West Africa.
CWP has qualifications of consultation and design in field of wind & solar power, and overall
contracting of electric power projects. At present, CWP is a professional wind & solar power group
company with the most comprehensive industry chain in the field of wind and solar power
investment in China. CWP owns high-class technical human resources as well as management
team.
For the first half of 2014, revenue from EPC accounted for around 37% of total company profits
(excluding non-segmental expenses), while power plant investments accounted for around 47%.
O&M and other gains accounted for the remaining 13% and 3% respectively.
Figure 4 CWP – Profit breakdown (excluding non-segmental expenses)in
1H14
Figure 3 CWP - Revenue breakdown in 1H14
3%
13%
9%
5%
37%
47%
85%
EPC
Power plant investments
EPC
O&M
Source: Company data, Guosen Securities(HK) Research
Power plant investments
O&M
other gains
Source: Company data, Guosen Securities(HK) Research
Figure 5 CWP - Shareholder structure
Source: Company data, Guosen Securities(HK) Research
Guosen Securities (HK)
3
China Windpower (182 HK)
Raymond Ip, +852 2899 3142, raymond.ip@guosen.com.hk
Figure 6 CWP – Profile of Key Management
Name
Mr. Liu Shunxing
Mr. Ko Chun Shun, Johnson
Mr. Ya ng Zhife ng
Mr. Wang Xun
Ms. Liu Jianhong
Dr. Yu We izhou
Mr. Zhou Zhizhong
Mr. Hu Mingyang
Ms. Ko Wing Yan, Sa mantha
Title
Profile
a ge d 52, joined the Group in 2007. He ha s be come the Cha irman of the Company since June 2009. He is
a ls o a director of various subsidiarie s of the Group. Mr. Liu holds a Bachelor degre e of Electricity
Gene ra tion from Tianjin University a nd a Ma ster degre e of Ene rgy Source Economy Ma nagement from the
Cha irman
Ma na geme nt Colle ge of Ha rbin Ins titute of Technology. An Exe cutive of China Energy Council, the vice
pre side nt of China Energy Rese arch Ins titute a nd a Deputy Director of Energy Cons ervation and Enterprise
Ene rgy Manage ment Committe e. He once worke d in Nationa l De velopment and Reform Commiss ion and
China Energy Conservation Inves tme nt Corporation.
a ge d 62, joined the Group in 2006 as the Cha irman a nd wa s re -designated a s Vice -Chairman of the
Company s ince June 2009. He is also the deputy cha irman and e xecutive director of DVN (Holdings) Limited,
the cha irman a nd executive dire ctor of Reorient Group Limited and Va ritronix Interna tional Limited. The
a bove compa nies are a ll listed on the Hong Kong Stock Exchange . Mr. Ko is a ls o a director of a subsidiary of
Vice Chairman
the Group. Mr. Ko is the father of Ms. Ko Wing Yan, a mantha , a n exe cutive Director. Mr. Ko ha s exte nsive
e xperie nce in a varie ty of a ctivities, including manufacturing, se curities trading, internationa l tra de,
e le ctronics a nd the renewable e nergy indus try. He a ls o ha s extensive experie nce in corporate finance,
corporate restructuring and merge rs a nd a cquis itions .
a ge d 43, joined the Group in 2007. He ha s be come the Chief Executive Office r (“CEO”) of the Company since
12 November 2013 a nd is a ls o a dire ctor of various s ubs idiaries of the Group. Mr. Ya ng holds his Ma ster
CEO
degre e in Interna tional Finance from Renmin University of China . Forme r Ge neral Mana ge r of Ass et
Ma na geme nt a nd Operation Dept in China Ene rgy Conse rvation Inve stment Corporation, posse ss es >9
yea rs of e xpe rience in rene wable industry.
a ge d 47, joined the Group in 2007. He is a director of various s ubs idiarie s of the Group. Mr. Wang holds an
Exe cutive Ma ster of Busine ss Administra tion from Che ung Kong Graduate School of Busines s. Formerly he ld
Vice Pre sident
s enior positions at Golde n Concord Holdings Limited, and pos se ss es >15 years of experience in renewa ble
e nergy indus try.
a ge d 45, joined the Group in 2007. She is the Vice Pres ident of the Company and is a ls o a director of various
s ubsidiarie s of the Group. Ms. Liu holds he r Mas te r de gree from the La w School of Renmin University of
Vice Pre sident
China a nd an EMBA from China Europe Inte rnational Bus ines s School. Forme r Chie f Lega l Officer of China
Ene rgy Conse rvation Inve stment Corporation, pos se ss ing 9 ye ars of experie nce in renewa ble ene rgy
indus try.
a ge d 49, joined the Group in 2009. He is currently the Vice Pre side nt of the Company and is also a director
of various s ubs idia ries of the Group. He holds a Ba chelor degree in s ta tistics a nd a Mas ter degree in finance
from Re nmin Unive rs ity of China and a Ph.D de gree of Engine ering Manage ment from Xian Unive rs ity of
Vice Pre sident
Technology. Forme r De puty Chief Engineer of Guohua Energy Inves tme nt Ltd. Als o previously s erved a t Sta te
Electricity Re gula tory Commiss ion of the PRC (SERC) and the Nation’s Ele ctric De pt. Poss es ses strong power
indus try knowledge a nd many ye ars of experie nce in renewable ene rgy project de velopment.
a ge d 57, joined the Group as Vice Pres ident in 2009, a nd had be come the executive director of the
Company s ince June 2011. He is also a dire ctor of va rious subs idia ries of the Group. Mr. Zhou holds a
Ma ster degre e from Na njing Univers ity of Science and Te chnology. He is in cha rge of EPC bus iness ; former
Vice Pre sident
Chairman of Na njing Power Supply Burea u, the Gene ra l Manager of Jia ngs u Power Cons truction Company
a nd the VP of the Golde n Concord Group. National re gistered 1s t cla ss construction engineer. Pos ses se s
ove r 20 yea rs of power engineering e xpe rience.
a ge d 42, joined the Group in 2009. He is the Chie f Fina ncia l Officer of the Compa ny. He holds a Ma ster
degre e in e conomics from Pe king University, and is a certifie d public a ccounta nt. Mr. Hu had s erved a s the
CFO
director of the financia l a ffair depa rtment of China Council for the Promotion of Inte rnational Trade . Als o
s erve d as the s ecretary of Board in China Exhibition Inve stment & Developme nt Co.,Ltd. And the gene ra l
ma na ger of China Patent Age nt (H.K.) Ltd.
a ge d 34, joined the Group in 2009. Ms. Ko holds a Ba chelor De gree in Economics a nd Ma the matics from
Mount Holyoke Colle ge , and a Mas te r De gree in Fina nce from the Imperial Colle ge Ma nageme nt School in
Executive Director
London. Forme r director of structure d credit and fund solutions departme nt a t HSBC, over 7 yea rs
e xperie nce in investment and financing.
Source: Company data, Guosen Securities(HK) Research
Guosen Securities (HK)
4
China Windpower (182 HK)
Raymond Ip, +852 2899 3142, raymond.ip@guosen.com.hk
Wind/Solar farm operators – Long term positive
Non-fossil fuel energy demand will continue to rise
Electricity generated from
non-fossil fuels accounted
for 9.8% of China’s energy
in 2013, which should
increase to 15% by 2020
To cut carbon dioxide emissions, China is in the process of switching to non-fossil energy sources
for power. In 2013, non-fossil fuels generated around 9.8% of China’s energy, up from 9.1% in
2012. According to the National Energy Administration (NEA), the percentage should rise to 10.7%
by the end of this year, and 11.4% by end of 2015. Long term, it is expected that the non-fossil
fuels generation percentage would further rise to 15% by 2020 and 24.5% by 2035, at the expense
of reduction in coal power output.
To achieve these goals, NEA is aiming to raise the installed capacity of non-fossil fuel to a third of
total installed capacity this year, compared to close to 30% in 2013. We believe the strong
commitment to invest in clean energy by the government will continue to benefit wind and solar
farm operators in the long term.
Wind outlook: Steadily growing
2013-2017 wind capacity
CAGR: 17%
We expect the annual wind capacity addition would be around 17GW in the next few years,
translating into around 17% CAGR from 2013 to 2017. From 2011 to present, NEA has already
approved 109GW of new wind power projects. We believe more approved projects would be
announced in the future.
Figure 7 China: Cumulative grid-connected wind power capacity
GW
250
120%
206
185
200
165
80%
146
150
100%
128
111
60%
94
100
78
48
50
1
2
4
31
18
8
40%
63
20%
0
0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E
Cumulative grid-connected wind power capacity (GW)
Growth rate (RHS)
Source: CNREC, Guosen Securities(HK) Research
Figure 8 China: Newly added grid connected capacity each year
GW
25
20
17
14
15
17
15
17
17
18
19
20
21
15
9
10
4
5
1
2
0
2006
2007
2008
2009
2010
2011
2012
2013 2014E 2015E 2016E 2017E 2018E 2019E 2020E
Source: CNREC, Guosen Securities(HK) Research
Guosen Securities (HK)
5
China Windpower (182 HK)
Raymond Ip, +852 2899 3142, raymond.ip@guosen.com.hk
Solar outlook: Explosive growth ahead
2013-2017 solar capacity
CAGR: 38%
Solar power operators are rapidly expanding their capacity. As the end of 2012, China had around
6.5GW of solar capacity connected to the grid. Last year, around 12.9GW of new solar capacity was
added to the grid, resulting in a cumulative solar capacity of 19.4GW installed and connected in
China as of end of 2013. In 1H14, around 3.3GW of new solar capacity was added. The market
expects that 13GW could be added in full year 2014, meaning that 10GW could be added in 2H14
with 4Q14 would be the peak installation season.
Long term, NDRC has stated its intent to reach the 70GW installation target of solar capacity by
2017, translating into a 38% CAGR of solar capacity growth from 2013-2017.
Figure 9 China: Cumulative solar power capacity
GW
80
70.4
70
350%
300%
57.4
60
250%
44.4
50
40
31.9
30
19.4
20
10
0.0
0.0
0.0
0.1
0.1
0.1
0.1
0.1
0.1
0.3
0.8
3.3
6.5
200%
150%
100%
50%
0
0%
Cumulative solar power capacity (GW)
Growth rate (RHS)
Source: EPIA, NEA, Guosen Securities(HK) Research
Figure 10 China: Newly added solar capacity each year
GW
14
12.9 12.5 12.5 13.0 13.0
12
10
8
6
4
2.5
2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.2
3.2
0.5
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E
Source: EPIA, NEA, Guosen Securities(HK) Research
Guosen Securities (HK)
6
China Windpower (182 HK)
Raymond Ip, +852 2899 3142, raymond.ip@guosen.com.hk
Strategic cooperation with Huadian Fuxin
Positive to CWP
CWP will provide EPC
services up to 3.5GW of
wind power projects to
Huadian Fuxin
CWP issued 880mn of new shares to Huadian Fuxin (816.HK, Non rated) at HK$0.43/share, and the
deal was completed on 19 March 2014. With a 9.84% stake, Huadian Fuxin is now the third-largest
shareholder of the company following the founders (24.0%) and Mr. Johnson Ko (22.5%).
In addition, CWP and Huadian Fuxin reached a business cooperation agreement on 28 December
2013. Under the agreement, CWP will provide EPC and maintenance services for 3.5GW of wind
power projects to Huadian Fuxin (the company expects it can provide at least 850MW of wind
power projects this year). Huadian Fuxin, in return, will provide project financing for CWP. In
addition, CWP is allowed to develop its wind power projects or with other third parties only if
Huadian Fuxin forfeits its right to acquire or develop these wind power projects. Moreover, CWP
has the priority right to provide EPC and maintenance services for the wind power projects
developed by Huadian Fuxin at the prevailing market price.
We believe this cooperation agreement is highly positive to CWP, as cash generated from the EPC
services for Huadian Fuxin could help the company to develop more solar or wind farms,
increasing its recurring profit in the long term. Given that Huadian Group, the parent of Huadian
Fuxin, is one of the five largest state-owned power generation enterprises in China, we believe
CWP would be able to benefit from this strategic cooperation and could potentially gain more
clean energy projects going forward.
Figure 11 Strategic cooperation with Huadian Fuxin
Source: Company data, Guosen Securities(HK) Research
Profile of Huadian Fuxin
Huadian Fuxin is China’s leading clean energy company with diversified power generation
combinations. Established in Fujian as a wholly owned subsidiary of China Huadian Corporation, it
was listed on HKSE on June 2012.
As of end of June 2014, Huadian Fuxin had hydropower installed capacity of 2.5GW, wind power
installed capacity of 3.6GW, coal-fired power installed capacity of 3.9GW, solar power installed
capacity of 0.5GW, and some capacities in distributed energy and biomass power. In addition, it
had 39% equity interests in four nuclear power generating units under construction (each with
1GW). The first nuclear unit is expected to connect to the grid by end of this year.
Guosen Securities (HK)
7
China Windpower (182 HK)
Raymond Ip, +852 2899 3142, raymond.ip@guosen.com.hk
What we like about CWP
Rapid growth in solar power generation
Expect attributable capacity
for solar power to increase
to 500MW by end of this
year
CWP started feasibility study and setting development strategy for solar power in 2010, and
successfully developed 48MW of solar power plants in 2011. At the end of 1H14, CWP had an
attributable capacity of 154MW in solar power. The company targets to increase the capacity to
around 500MW by the end of this year.
Figure 12 Solar power projects pipeline
Project
Province
Naidong
Tibet
Yushen
Shanxi
Pingyuan
Capacity (MW) Stake
Tariff (Rmb/kWH) Status
20
100.0%
1.15 under cons truction
200
100.0%
0.95 under cons truction
Shandong
40
100.0%
1.2 under cons truction
Yuyang
Shanxi
50
100.0%
0.95 under early construction
Huaping
Yunna n
10
100.0%
0.95 under early construction
Eeryua n
Yunna n
3.5
100.0%
0.95 under early construction
Pingquan
Hebei
30
100.0%
1.2 under early construction
Indiana Solar LLC
US
11.1
Total Capacity
365
Attributable capacity
365
100.0% USD0.2
under early construction
Source: Company data, Guosen Securities(HK) Research
Figure 13 CWP: Existing solar power projects
Year
Project
Province
Capacity (MW)
Stake
Tariff (Rmb/kWH)
2011 Delingha Phase I
Qinghai
30
100.0%
1.15
2011 Suqian
Jiangsu
8.88
49.0%
2.4
2011 Wuwei
Gansu
9
100.0%
1.15
2012 Gonghe
Qinghai
30
60.0%
1
2012 Delingha Phase II
Qinghai
20
100.0%
1
2012 Hoku Solar Power I
US
0.9
100.0% US0.39
2012 Urban Energy Solar LLC US
1
100.0% US43k/m
2013 Yongren
Yunnan
50
97.0%
1
2013 Delingha Phase III
Qinghai
20
100.0%
1
2013 GSE WI 1, LCC
US
1
Total Capacity
171
Attributable capacity
153
80.0% US0.8
1.099
Source: Company data, Guosen Securities(HK) Research
During 1H14, CWP signed 1,370MW of solar power exclusive development right agreements. As of
end of June 2014, the company had over 7.5GW of exclusive solar reserves in the pipeline. We
believe the company can leverage its expertise in the wind power sector to ramp up its solar
power business. We believe CWP would add around 300MW of solar power capacity annually in
FY15 and FY16, lifting the total attributable capacity for solar power to around 1.1GW by the end
of FY16.
Management believes that the equity IRR for a typical solar power plant could reach around 19%,
higher than the 12% for wind power plant. Short to mid-term, the company’s strategy is to
prioritize solar power development and investment growing this segment into one of the CWP’s
core businesses.
Guosen Securities (HK)
8
China Windpower (182 HK)
Raymond Ip, +852 2899 3142, raymond.ip@guosen.com.hk
Figure 14 CWP: Exclusive solar reserves location
Source: Company data, Guosen Securities(HK) Research
Steadily growing wind power business
Expect attributable capacity
for wind power to increase
to 700MW by end of this
year
While CWP is rapidly growing its solar power business, it aims to avoid concentrating in any one
particular area. Thus, the company is also expanding its wind power project pipeline. At the end of
1H14, CWP had an attributable capacity of 550MW in wind power. The company targets to
increase the capacity to around 700MW by the end of this year. During 1H14, CWP signed 950MW
of wind power exclusive development right agreements, and as of end of June 2014, the company
had over 28GW of exclusive wind reserves in the pipeline. With over 9 years of development and
operational experience in the wind sector, we believe the company can continue to expand
steadily its wind power business in the long term. We believe CWP would add around 150MW of
wind power capacity annually in FY15 and FY16, lifting the total attributable capacity for wind
power to around 1GW by the end of FY16.
Figure 15 Wind power projects pipeline
Project
Province
Capacity (MW) Stake
Tariff (Rmb/kWH) Status
Zilingpu
Liaoning
48
59.3%
0.61 under construction
Hebi Huolonggang
Inner Mongolia
49.5
59.3%
0.61 under construction
Gaotong
Inner Mongolia
48
49.0%
0.61 under construction
Sihong
Jilin
50.4
30.0%
0.61 under construction
Dongtian
Liaoning
48
100.0%
0.61 under construction
Jinquan
Liaoning
48
100.0%
0.61 under construction
Yiyang Fancun
Inner Mongolia
48
49.0%
0.61 under construction
Total Capacity
340
Attributable capacity
216
0.61
Source: Company data, Guosen Securities(HK) Research
Guosen Securities (HK)
9
China Windpower (182 HK)
Raymond Ip, +852 2899 3142, raymond.ip@guosen.com.hk
Figure 16 CWP: Existing wind power projects
Year
Project
Province
2006 Changtu Pha se I
Lia oning
2008 Taiqi Phase I
Capacity (MW)
Stake
Tariff (Rmb/kWH)
50.25
25.0%
0.64
Inner Mongolia
49.5
49.0%
0.52
2008 Erlia nha ote Pha se I
Inner Mongolia
21
49.0%
0.52
2009 Linchang Phase I
Jilin
49.5
49.0%
0.61
2009 Mazongs han
Lia oning
49.5
24.5%
0.61
2009 Qujia gou
Lia oning
49.5
24.5%
0.61
2009 Zhaqi Phase I
Inner Mongolia
49.5
49.0%
0.54
2009 Heiyupa o Phase I
Jilin
49.5
49.0%
0.61
2010 Wuchua n Yihemei
Inner Mongolia
49.5
46.0%
0.51
2010 Huadeng Phase I
Inner Mongolia
49.5
32.0%
0.54
2010 Huadeng Phase II
Inner Mongolia
49.5
32.0%
0.54
2010 Zhalute Pha se II
Inner Mongolia
49.5
32.0%
0.54
2010 Zhalute Pha se III
Inner Mongolia
49.5
32.0%
0.54
2010 Guazhou
Ga nsu
201
51.5%
0.52
2011 Kailu
Inner Mongolia
49.5
32.0%
0.54
2011 Touzhijia n
Inner Mongolia
49.5
51.0%
0.51
2011 Maniuhu
Lia oning
49.5
30.0%
0.61
2011 Gulibengao
Lia oning
49.5
30.0%
0.61
2012 Heiyupa o Phase III
Jilin
49.5
32.0%
0.58
2012 Heiyupa o Phase IV
Jilin
49.5
32.0%
0.58
2012 Tiancha ng
Anhui
48
49.0%
0.62
2013 Chaoyang Wanjia
Lia oning
48
30.0%
0.61
2013 Jianghua Ya ozu
Hunan
48
59.0%
0.61
2013 Xiaoxian Guans han
Anhui
48
49.0%
0.61
2013 Suzhou Fuli
Anhui
48
49.0%
0.61
Total Capacity
1,354
Attributable capacity
550
0.5556
Source: Company data, Guosen Securities(HK) Research
Figure 17 CWP: Exclusive wind reserves location
Source: Company data, Guosen Securities(HK) Research
Guosen Securities (HK)
10
China Windpower (182 HK)
Raymond Ip, +852 2899 3142, raymond.ip@guosen.com.hk
Wind/Solar farms investments funded by cash flows from its solid EPC business
Expects 550-600MW of EPC
contracts to be completed in
FY14
The EPC segment of CWP mainly undertakes wind power and solar power EPC projects within
China (and insignificant amount in Ghana). For a typical all-inclusive EPC wind power project, the
construction revenue is around Rmb7.5-8.0/watt, while for a typical EPC solar power project, the
construction revenue is around Rmb8.0-8.5/watt. During 1H14, revenue from EPC was up 215%
YoY to HK$1.02bn, with 16 EPC projects were constructed (+46% YoY), and 69 design &
consultancy reports were provided (-1.4% YoY) during the period. Some of the projects CWP
undertook include projects from China Power Investment Group, Huaneng New Energy Co.,
Huadian Fuxin, Shenzhen Energy Group Company, etc.
Figure 18 EPC operational data (FY12 – 1H14)
FY12
No of projects constructed
FY13
13
1H13
16
1H14
YoY
11
16
45.5%
No of design & consultancy reports provided
197
224
70
69
-1.4%
Revenue from EPC (HKD mn)
907
1644
324
1021
214.8%
Source: Company data, Guosen Securities(HK) Research
EPC is still the largest portion of CWP’s revenue (1H14: 85%). With rising contributions from
investments in wind/solar power plants in the next few years, we expect to see percentage of
revenue from EPC to decline from 87% in FY13 to 75% in FY16. We believe that, based on the
current environment, CWP could enjoy around 7-8% net margin for its EPC segment.
Figure 19 Revenue breakdown (FY09-FY16e)
100%
6%
90%
6%
9%
8%
18%
23%
81%
75%
FY15e
FY16e
80%
70%
60%
50%
97%
96%
40%
89%
83%
87%
85%
89%
FY12
FY13
1H14
FY14e
30%
20%
10%
0%
FY09
FY10
FY11
EPC + Equipment Manufacturing
O&M
Investments in power plants
Source: Company data, Guosen Securities(HK) Research
Huadian Fuxin, as the third largest shareholder of the company with a 9.84% stake, agreed to bring
in 3.5GW of wind power EPC projects to the company during 2014-16. 827MW of EPC projects has
already started construction, of which 443MW of projects (located in North China) should be
completed by the end of this year. In addition, EPC projects in cooperation with other partners
such as Huaneng and CPI etc. should contribute around 100-150MW of project as well in FY14. We
therefore believe CWP could complete around 550-600MW of EPC projects this year. We further
assume the company can complete around 700MW of EPC projects annually in the next two years
with most of the projects coming from Huadian Fuxin.
Backed by cash flow generated annually from the EPC segment, together with the HK$378mn
proceeds from the new share issuance to Huadian Fuxin, we expect CWP would be able to expand
the attributable capacity of its wind and solar power farms in the coming future.
Guosen Securities (HK)
11
China Windpower (182 HK)
Raymond Ip, +852 2899 3142, raymond.ip@guosen.com.hk
Further upside from moving into distributed PV projects
Distributed generation refers to electricity generated at or near the point where it is used. We
highlight the main differences between distributed PV and traditional utility-scale projects below:
Figure 20 Comparison between Distributed PV and utility scale projects
Locations
Connections
Curtailment
Investment
costs
Operation
Tariffs
Subsidies
Distributed PV projects
near or at the point of usage such as cities/towns, can leverage
existing assets to lower start-up costs
Low voltage connection and short term tranmission, much less power
loss
Independence from utility grid, low or no curtailment
Low lump sum costs initially. Around Rmb9-12/watt
Low maintainence / no need of professional knowledge to maintain
Rmb0.9-1.0/kWh FiT (if choose to sell all the generated power to the
grid)
Standard subsidy is Rmb0.42/kWh. Individual provinces/cities could
have extra subsidies, such as Shandong suggest extra Rmb0.05/kWh,
Guangzhou city suggest extra Rmb0.1/watt
Utility scale projects
Remote areas, hill tops, far from cities/towns
Need to connect to UHV for long distance transmission and
could suffer power loss
Could suffer from grid curtailment on peak generating
periods
High lump sum costs with much larger scale. Around Rmb 89/watt
Need to team of profesionals to maintain on day to day basis
Rmb0.9-1.0/kWh FiT
Individual provinces might provide subsidies
Source: NEA, Guosen Securities(HK) Research
CWP could benefit from
more EPC or investment
opportunities in distributed
PV projects amid related
favorable policy that was
announced on Sept 2014.
On Sept 2014, NEA announced the latest policy regarding distributed PV projects. Some of the key
areas are highlighted below:
Able to choose different modes: Developers can choose to sell all the power to the grid at FiT
which is equivalent to utility scale projects (Rmb0.9-1.0/kWh), or stick to the original mode, which
is self-use and sell remaining power to the grid (which enjoys Rmb0.42/kW of subsidy, with extra
subsidies possible in certain provinces/cities). Developers can also choose to switch from “self-use
mode” to “sell all power mode” if self-use power declines substantially.
Broaden definition of distributed PV: Solar projects in greenhouses, wasteland, lakes etc that are
under 20MW in scale can also be qualified as distributed PV.
Encourage government participation: Local governments are recommended to promote
distributed PV projects through looking for suitable rooftop resources and coordinating
infrastructure investments. Local governments are also encouraged to provide extra subsidies if
possible.
External support: Grid companies are required to be accommodative ensuring smooth
connections to the grid and providing upgrades if needed. In addition, banks and other financial
institutions are encouraged to provide low cost financing for developers and investors.
We believe investments in distributed PV would be getting more attention from going forward, as
government policies are getting more favorable to developers and investors. Investors still need
to consider issues such as the load capacity of the rooftop of the properties, potential leakage
problems and security issues, but we believe returns for distributed PV projects (IRR generally
around 10-15%) are attractive enough to lure investments in this segment.
Out of the 3.3GW of solar power installed in China in 1H14, around 1GW were distributed PV
projects. We believe 2H14 could see a boom in new installations and expect 5-6GW of distributed
PV projects could be added during the period.
Currently, CWP has an oversea distributed PV project under construction in United States with
11.1MW in capacity. The company also reached an agreement with Shanghai Municipal
Commission of Economy and Information Commission on March 2014 to invest, develop and
operate 500MW of distributed solar and LED lighting in Shanghai and the surrounding areas for
properties not limited to government office buildings, infrastructures, industrial workshops, roofs
of large shopping centers, exhibition centers, etc. We believe with the latest policy regarding
distributed PV projects recently announced, CWP could benefit from more EPC or investment
opportunities in the distributed PV segment in the future.
Guosen Securities (HK)
12
China Windpower (182 HK)
Raymond Ip, +852 2899 3142, raymond.ip@guosen.com.hk
Investment risks
Potential tariff cuts
Market is expecting wind power FiT could be cut by the end of this year or early next year.
However, we believe this would only affect new built wind farms and the tariff cut probably would
not be very significant. In addition, wind power only forms part of the company’s revenue. We
expect solar power tariff would remain stable for a long period of time, since the latest FiT revision
(range from Rmb0.9-1.0/kWh) was just revised recently in August 2013, It is expected the
execution period would be as long as 20 years.
Slowdown in capacity addition from Huadian Fuxin
If Huadian Fuxin, the strategic partner and shareholder of CWP, decides to slow down its capacity
addition in the coming years, it would negatively affect CWP’s EPC revenue, as a majority of its EPC
revenue would be coming from Huadian Fuxin.
Delays in CWP’s wind or solar projects
We expect CWP to add 300MW/150MW of solar/wind power capacity each year in FY15 and FY16.
Delays due to any reasons might result in less than expected earnings in these years.
Wind resources continue to be weak
Wind speed was low in the first nine months this year, leading to weak share prices YTD for the
whole wind power sector. Since wind speed is unpredictable, any further decline in wind
resources could result in de-rating of the wind sector, which would also affect the valuation of
CWP.
Potential selling of shares from Vice Chairman Mr. Johnson Ko
Vice Chairman Mr. Johnson Ko is currently holding 22.5% stake of CWP. Any reduction in his stake
in the company could be an overhang to share price.
Potential equity raising
Annual capex is around HKD4bn from FY14 to FY16 to accommodate the capacity expansion plan
for both wind and solar power projects. Net gearing would increase from 10% in FY13 to 67% in
FY14 and 117% in FY15. Equity raising is possible in the future.
Guosen Securities (HK)
13
China Windpower (182 HK)
Raymond Ip, +852 2899 3142, raymond.ip@guosen.com.hk
Financial assumptions
Revenue forecast
Figure 21 CWP - Revenue forecast
HKD mn
Wind Projects
2014
2015
Attributable ca pacity at year sta rt (MW)
550
700
850
Attributable ca pacity at year end (MW)
700
850
1,000
27.7%
21.4%
17.6%
560
720
870
28.6%
20.8%
YoY
Avg operating capa city (MW)
YoY
2016
Avg utilization hours
1,720
1,800
1,850
Availability rate
95.8%
95.8%
95.8%
Curta ilment ra te
14.2%
12.5%
11.0%
792
1,087
1,373
0.5556
0.5445
0.5227
Attributable generation (m kWh)
Avg Tariff (Rmb/kWh)
Revenue, including JV/associates
554
YoY
Revenue consolida tes to compa ny P/L
154
746
904
34.5%
21.3%
162
162
4.6%
0.4%
2.7%
2.2%
2.0%
Tota l ca pacity a t year sta rt (MW)
171
521
821
Tota l ca pacity a t year end (MW)
521
821
1,121
36.6%
YoY
% of total revenue
Solar Projects
204.5%
57.6%
Attributable ca pacity at year sta rt (MW)
YoY
153
503
803
Attributable ca pacity at year end (MW)
503
803
1,103
226.3%
59.7%
37.4%
YoY
Avg operating capa city (MW)
173
YoY
563
863
224.3%
53.3%
1,600
Avg utilization hours
1,550
1,600
Availability rate
99.8%
99.8%
99.8%
268
898
1,377
1.099
1.099
1.099
372
1,244
1,907
234.7%
53.3%
Attributable generation (m kWh)
Avg Tariff (Rmb/kWh)
Revenue
YoY
Inter-segment sales
(46)
Net revenue
325
YoY
% of total revenue
5.7%
(92)
(184)
1,151
1,723
253.8%
49.6%
15.4%
21.4%
O&M
Revenue
% of total revenue
130
140
150
2.3%
1.9%
1.9%
5,143
6,000
6,000
89.4%
80.5%
74.7%
5,753
7,453
8,035
205.6%
29.6%
7.8%
EPC
Revenue
% of total revenue
Overall
Revenue
YoY
Source: Company data, Guosen Securities(HK) Research
Revenue from EPC segment would still be the major contributor of total revenue in FY14-16,
although the proportion is expected to decline from 89.4% in FY14 to 74.7% in FY16, as more solar
power projects would commence operation in the next few years. Wind power would also have
rising contribution to the bottom line via profits from JV/associates as most of their wind projects
Guosen Securities (HK)
14
China Windpower (182 HK)
Raymond Ip, +852 2899 3142, raymond.ip@guosen.com.hk
in the pipeline have less than 50% stake and would not be consolidated into CWP’s reported
revenue.
We forecast total revenue to grow 205.6% in 2014 to HK$5,753mn, 29.6% in 2015 to HK$7,453mn,
and 7.8% in 2016 to HK$8,035mn. The growth is due to 1) rapid growth in the EPC segment in
FY14-15, and 2) contribution from new solar plants in FY14-16
EBIT margin forecast
In FY13, EBIT margin declined by 1.6 percentage points to 16.4%, as EPC segment, with lower
margin, contributed more to the total revenue. We estimate CWP’s EBIT margin will bottom in
FY14 at 11.1% as EPC sales to total revenue peak in FY14, and would gradually expand to 15.2%
and 18.0% in FY15 and FY16 respectively, on the back of higher margins from the growing
wind/solar power generation segment.
Figure 22 CWP - EBIT and EBIT margin (FY11-FY16)
HKD mn
1,600
41.5%
45.0%
1,400
40.0%
1,200
35.0%
30.0%
18.0%
1,000
800
18.0%
600
25.0%
15.2%
16.4%
20.0%
11.1%
15.0%
400
10.0%
200
5.0%
0
0.0%
FY11
FY12
FY13
EBIT
FY14E
EBIT margin
FY15E
FY16E
Source: Company data, Guosen Securities(HK) Research
Finance expenses and capex forecast
We believe CDEP’s capex would be HK$3,750mn, HK$4,050mn and HK$4,050mn in FY14, FY15 and
FY16 respectively, as the company is aggressively adding more wind and solar capacity in the
coming years. We forecast that finance expenses for the company will increase 60.7% to
HK$166mn in FY14, 120.1% to HK$366mn in FY15 and 48.3% to HK$543mn in FY16, on rising loans
to fund new capital expenditure each year.
Figure 23 Capex forecast (FY12-FY16)
HKD mn
4,500
3,750
4,000
4,050
4,050
2015e
2016e
3,500
3,000
2,500
2,000
1,500
1,000
500
407
566
0
2012
2013
2014e
Source: Company data, Guosen Securities(HK) Research
Guosen Securities (HK)
15
China Windpower (182 HK)
Raymond Ip, +852 2899 3142, raymond.ip@guosen.com.hk
Net profit forecast
On the back of strong revenue growth and higher contributions from JV/associates (wind power
generations), we estimate net profit will grow 193.9% in FY14 to HK$444mn, 56.9% in FY15 to
HK$697mn and 16.6% in FY16 to HK$812mn. Accordingly, net margin will expand from 7.7% in
FY14 to 9.3% and 10.1% in FY15 and FY16 respectively.
Figure 24 Net profit forecast (FY11-FY16)
HKD mn
900
45.0%
38.8%
800
40.0%
700
35.0%
600
30.0%
500
25.0%
400
20.0%
300
8.0%
200
7.7%
9.3%
10.1%
15.0%
10.0%
3.7%
100
5.0%
0
0.0%
FY11
FY12
FY13
Net Profit
FY14E
NP margin
FY15E
FY16E
Source: Company data, Guosen Securities(HK) Research
Valuation
Initiate coverage with BUY rating & target price of $0.9
CWP is currently trading at 7.7x 15PE, around 40% discount compared to Hong Kong listed
wind/solar farm operators peers. We believe CWP’s core EPC business will continue to benefit
from the aggressive expansion of wind/solar power plants in China backed by favorable renewable
energy policies. With rapidly rising proportions of revenue from wind/solar power generation
going forward, we believe CWP could be re-rated to have a PE valuation similar to peers. Our
target price of HK$0.9 is based on 11.5x 15PE, which is a 10% discount to the average 15PE of its
peers group (12.8x 15PE) due to CWP’s smaller market cap and higher proportion of EPC revenue
compare to peers. We initiate coverage on CWP with a BUY rating.
Guosen Securities (HK)
16
China Windpower (182 HK)
Raymond Ip, +852 2899 3142, raymond.ip@guosen.com.hk
Figure 25 Peers Valuation
Mkt Cap
(USD)
14PE
0.60
703
12.1
7.7
6.6
1.0
0.9
0.8 0.0% 0.0% 0.0%
8.6
12.5
13.3
CHINA LONGYUAN POWER GROUP-H
7.38
7,645
16.7
13.2
11.1
1.4
1.3
1.2 1.2% 1.5% 1.9%
8.9
10.5
12.1
HUANENG RENEWABLES CORP-H
2.53
2,945
15.1
11.9
9.0
1.2
1.1
1.0 1.3% 1.7% 2.4%
8.3
9.8
11.2
* 1798 HK CHINA DATANG CORP RENEWABL-H
1.05
985
34.8
18.5
13.5
0.6
0.6
0.6 0.6% 1.1% 1.7%
1.8
3.4
5.3
579 HK
BEIJING JINGNENG CLEAN ENE-H
3.41
3,020
12.4
8.2
6.9
1.5
1.2
1.0 1.9% 2.7% 3.2%
12.5
16.1
16.5
816 HK
HUADIAN FUXIN ENERGY CORP -H
4.45
4,577
14.1
10.8
8.7
2.0
1.7
1.5 1.4% 1.9% 2.3%
15.2
16.9
17.5
956 HK
CHINA SUNTIEN GREEN ENERGY-H
1.92
920
11.5
9.0
7.0
0.7
0.7
0.6 2.2% 2.8% 3.9%
7.8
8.7
10.8
750 HK
CHINA SINGYES SOLAR TECH
13.6
1,219
10.6
8.5
7.7
2.3
1.8
1.5 0.9% 1.1% 1.3%
22.9
23.8
21.6
686 HK
UNITED PHOTOVOLTAICS GROUP L
0.87
489
22.3
8.7
1.2
1.0
0.9
3.3%
(18.8)
19.6
7.9
AVERAGE
* from Guosen Securities (HK) estimates
12.8
9.1
1.4
1.2
1.0
1.4% 1.8% 2.5%
7.3
13.6
12.9
China Wind & Solar Power Operators
Price
* 182 HK
CHINA WINDPOWER GROUP LTD
* 916 HK
* 958 HK
16.4
15PE
16PE
14PB 15PB 16PB 14DY 15DY 16DY 14ROE 15ROE 16ROE
Global Wind Power Operators
Price
Mkt Cap
(USD)
14PE
EGPW IM
ENEL GREEN POWER SPA
1.85
11,721
17.4
16.5
14.7
1.2
1.1
1.1 1.7% 1.8% 2.1%
6.7
6.9
7.3
EDPR PL
EDP RENOVAVEIS SA
5.21
5,771
37.8
29.4
24.8
0.8
0.8
0.8 0.8% 1.0% 1.1%
2.0
2.6
2.9
ANA SM
ACCIONA SA
52.7
3,817
49.7
25.9
17.9
0.9
0.9
0.8 1.7% 1.9% 2.3%
2.6
3.6
5.1
NEE US
NEXTERA ENERGY INC
92.8
40,490
17.4
16.4
15.3
2.1
2.0
1.9 3.1% 3.3% 3.5%
12.3
12.4
12.5
IBE SM
IBERDROLA SA
5.42
43,394
15.2
14.6
13.6
0.9
0.9
0.9 5.0% 5.1% 5.2%
6.4
6.3
6.7
NPI CN
NORTHLAND POWER INC
16
2,093
43.4
42.5
40.4
3.1
2.6
2.5 6.8% 6.8% 6.8%
0.5
6.3
7.5
AQN CN
ALGONQUIN POWER & UTILITIES
8.62
1,723
24.4
21.3
17.1
1.6
1.4
1.4 4.2% 4.6% 5.0%
7.1
7.5
7.8
INE CN
INNERGEX RENEWABLE ENERGY
10.1
902
93.6
57.8
35.7
2.5
2.7
2.8 5.9% 6.0% 6.2%
ARN IM
ALERION CLEANPOWER
3.04
168
60.8
43.4
13.2
1.0
1.0
1.0 3.9% 3.9% 3.9%
1.5
2.8
7.2
40.0
29.8
21.4
1.6
1.5
1.5
4.9
6.1
7.1
AVERAGE
15PE
16PE
14PB 15PB 16PB 14DY 15DY 16DY 14ROE 15ROE 16ROE
3.7% 3.8% 4.0%
Source: Bloomberg, Guosen Securities(HK) Research
Figure 26 12 months forward PE band chart
Figure 27 12 months forward PB band chart
HK$
1.20
4.50
4.00
max 77.5X
1.00
max 1.7X
3.50
0.80
3.00
2.50
2.00
0.60
avg 26.3X
0.40
PE(x) 12.4X
0.20
+1sd 1.2X
PB(x) 1.0X
avg 0.8X
1.50
1.00
0.50
0.00
Jan-11
+1sd 46.2X
min 7.7X
-1sd 6.5X
Jan-12
Jan-13
Source: Bloomberg, Guosen Securities(HK) Research
Guosen Securities (HK)
Jan-14
0.00
Jan-11
-1sd 0.5X
min 0.4X
Jan-12
Jan-13
Jan-14
Source: Bloomberg, Guosen Securities(HK) Research
17
China Windpower (182 HK)
Raymond Ip, +852 2899 3142, raymond.ip@guosen.com.hk
Summary financial statements
Profit & Loss (HK$mn)
Revenue from Wind Power
2012A 2013A 2014E 2015E 2016E
Financial Ratios
Revenue growth (%)
2012A 2013A
2014E
2015E 2016E
0
0
0
0
0
14.7
71.2
206
29.6
7.8
Other Revenue
1,100
1,883
5,753
7,453
8,035
Operating profit growth (%)
(50.3)
56.4
107
76.4
27.5
Revenue
1,100
1,883
5,753
7,453
8,035
Reported profit growth (%)
(89.1)
274
194
56.9
16.6
Cost of sales
(792) (1,436) (4,699) (5,565) (5,580)
Underlying profit growth (%)
(89.1)
274
194
56.9
16.6
308
446
1,054
1,888
2,455
Underlying EPS growth (%)
(89.1)
274
194
56.9
16.6
64
16
(250)
(490)
(678)
Dividend growth (%)
(100)
0.0
0.0
0.0
0.0
(174)
(153)
(163)
(267)
(333)
Gross profit margin (%)
28.0
23.7
18.3
25.3
30.6
198
309
641
1,131
1,443
Operating profit margin (%)
18.0
16.4
11.1
15.2
18.0
Other non operating inc/(exp)
0
0
0
0
0
Underlying profit margin (%)
3.7
8.0
7.7
9.3
10.1
Finance income
0
0
0
0
0
Net debt/equity (%)
14.6
9.7
66.7
117
150
(86)
(103)
(166)
(366)
(543)
1
(13)
80
117
148
Profit before taxation
113
193
555
882
Taxation
(72)
(42)
(111)
(185)
Gross profit
Other income/(expense)
Operating expenses
Operating profit
Finance expenses
Associates & JCE
Net debt/total assets (%)
8.7
4.9
26.1
38.2
43.0
Current ratio (%)
169
118
100
93.0
97.9
1,048
Dividend payout (%)
0.0
0.0
0.0
0.0
0.0
(236)
Interest cover (x)
2.3
3.0
3.9
3.1
2.7
2012A 2013A
2014E
Non-controlling interests
(1)
0
0
0
0
Net profit
40
151
444
697
812
0
0
0
0
0
40
151
444
697
812
Other Adjustments on UP
Underlying Profit
Source: Guosen Research estimates
Dividend cover (x)
Dupont Analysis
2015E 2016E
Tax burden (%)
35.7
78.3
80.0
79.0
77.5
Interest burden (%)
57.1
62.4
86.5
78.0
72.6
Operating profit margin (%)
18.0
16.4
11.1
15.2
18.0
Asset turnover (x)
0.1
0.2
0.5
0.5
0.4
Leverage ratio (x)
1.7
1.8
2.3
2.8
3.3
ROA (%)
0.5
1.7
3.8
4.4
4.0
ROE (%)
0.9
3.2
8.6
12.5
13.3
2012A 2013A
2014E
2015E 2016E
1,131 1,443
Source: Guosen Research estimates
Balance Sheet (HK$mn)
2012A 2013A 2014E 2015E 2016E
Cashflow (HK$mn)
Fixed assets
1,248
2,238
5,806
9,523 13,084
Operating profit
198
309
641
Associates & JCE
1,810
1,856
1,856
1,856
1,856
Depreciation & amortization
47
64
187
338
Others
1,515
1,548
1,558
1,569
1,581
Interest income
13
25
20
20
20
Non-current assets
4,572
5,643
9,220 12,948 16,522
305
260
184
(45)
226
Change in working capital
Inventories
210
449
518
671
723
Debtors & prepayments
959
1,331
1,553
2,012
2,169
Tax paid
Other operating cashflow
Bank deposits & cash
731
1,850
1,521
1,213
1,811
Operating activities
495
(55)
(76)
(111)
(185)
(236)
(188)
(196)
(166)
(241)
(294)
321
386
756
1,018 1,654
Others
1,036
578
759
984
1,061
Purchase of non-current assets (Capex)
(706)
(357) (3,750) (4,050) (4,050)
Current assets
2,936
4,209
4,352
4,879
5,764
Free cash flow
(385)
29 (2,994) (3,032) (2,396)
84
1,068
1,174
1,292
1,421
Disposal of non-current assets
5
79
0
0
0
1,008
1,305
1,726
2,236
2,410
Associates & JCE (net)
8
(116)
0
0
0
8
19
20
20
20
11
69
80
117
148
(31)
0
0
0
Bank & other borrowings
Trade & payables
Taxation
55
26
26
26
26
585
1,174
1,409
1,691
2,029
Dividends received
Current liabilities
1,732
3,573
4,336
5,245
5,887
Other investing cashflow
Bank & other borrowings
1,298
1,262
3,887
6,722
9,962
Investing activities
Others
Others
Interest received
23
22
22
22
22
Non-current liabilities
1,321
1,285
3,910
6,745
9,985
Repayment of loans
Net assets
4,455
4,994
5,327
5,838
6,415
Share capital
New loans raised
(74)
(747)
(337) (3,650) (3,913) (3,882)
244
884
2,732
0
0
0
2,952 3,369
0
0
Dividends paid
(74)
0
0
0
0
Other financing cashflow
(76)
154
(166)
(366)
(543)
94
1,038
2,565
2,586 2,826
74
80
80
80
80
Premium & reserves
4,380
4,891
5,224
5,736
6,312
Financing activities
Shareholders' funds
4,454
4,971
5,305
5,816
6,393
Inc/(dec) in cash
(333)
1,087
(329)
(309)
1
22
22
22
22
Cash at beginning of year
1,064
731
1,850
1,521 1,213
4,455
4,994
5,327
5,839
6,415
Non-controlling interests
Total equity
Source: Guosen Research estimates
Foreign exchange effect
Cash at end of year
1
32
0
731
1,850
1,521
0
599
0
1,213 1,811
Source: Guosen Research estimates
Guosen Securities (HK)
18
China Windpower (182 HK)
Raymond Ip, +852 2899 3142, raymond.ip@guosen.com.hk
Information Disclosures
Stock ratings, sector ratings and related definitions
Stock Ratings:
Buy: A return potential of 10 % or more relative to overall market within 6 – 12 months.
Neutral: A return potential ranging from -10% to 10% relative to overall market within 6 – 12 months.
Sell: A negative return of 10% or more relative to overall market within 6 –12 months.
Sector Ratings:
Overweight: The sector will outperform the overall market by 10% or higher within 6 –12 months.
Neutral: The sector performance will range from -10% to 10% relative to overall market within 6 –12 months.
Underweight: The sector will underperform the overall market by 10% or lower within 6 – 12 months.
Interest disclosure statement
The analyst is licensed by the Hong Kong Securities and Futures Commission. Neither the analyst nor his/her associates serves as an
officer of the listed companies covered in this report and has no financial interests in the companies.
Guosen Securities (HK) Brokerage Co., Ltd. and its associated companies (collectively “Guosen Securities (HK)”) has no disclosable
financial interests (including securities holding) or make a market in the securities in respect of the listed companies. Guosen
Securities (HK) has no investment banking relationship within the past 12 months, to the listed companies. Guosen Securities (HK)
has no individual employed by the listed companies.
Disclaimers
The prices of securities may fluctuate up or down. It may become valueless. It is as likely that losses will be incurred rather than
profit made as a result of buying and selling securities.
The content of this report does not represent a recommendation of Guosen Securities (HK) and does not constitute any
buying/selling or dealing agreement in relation to the securities mentioned. Guosen Securities (HK) may be seeking or will seek
investment banking or other business (such as placing agent, lead manager, sponsor, underwriter or proprietary trading in such
securities) with the listed companies. Individuals of Guosen Securities (HK) may have personal investment interests in the listed
companies.
This report is based on information available to the public that we consider reliable, however, the authenticity, accuracy or
completeness of such information is not guaranteed by Guosen Securities (HK). This report does not take into account the particular
investment objectives, financial situation or needs of individual clients and does not constitute a personal investment
recommendation to anyone. Clients are wholly responsible for any investment decision based on this report. Clients are advised to
consider whether any advice or recommendation contained in this report is suitable for their particular circumstances. This report is
not intended to be an offer to buy or sell or a solicitation of an offer to buy or sell the securities mentioned.
This report is for distribution only to clients of Guosen Securities (HK). Without Guosen Securities (HK)’s written authorization, any
form of quotation, reproduction or transmission to third parties is prohibited, or may be subject to legal action. Such information
and opinions contained therein are subject to change and may be amended without any notification. This report is not directed at,
or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any jurisdiction where such
distribution, publication, availability or use would be contrary to applicable law or regulation or which would subject Guosen
Securities (HK) and its group companies to any registration or licensing requirement within such jurisdiction.
Guosen Securities (HK)
19
China Windpower (182 HK)
Raymond Ip, +852 2899 3142, raymond.ip@guosen.com.hk
信息披露
公司评级、行业评级及相关定义
公司评级
买入：我们预计未来 6-12 个月内，个股相对大盘涨幅在 10%以上；
中性：我们预计未来 6-12 个月内，个股相对大盘涨幅介于-10%与 10%之间；
减持：我们预计未来 6-12 个月内，个股相对大盘跌幅大于 10%。
行业评级
超配：我们预计未来 6-12 个月内，行业整体回报高于市场整体水平 10%以上；
中性：我们预计未来 6-12 个月内，行业整体回报介于市场整体水平-10%与 10%之间；
低配：我们预计未来 6-12 个月内，行业整体回报低于市场整体水平 10%以上。
利益披露声明
报告作者为香港证监会持牌人士，分析员本人或其有联系者并未担任本研究报告所评论的上市法团高级管理人员，也未持有
其任何财务权益。
本报告中，国信证券（香港）经纪有限公司及其所属关联机构（合称国信证券（香港））并无持有该公司须作出披露的财务
权益(包括持股)，在过去 12 个月内与该公司并无投资银行关系，亦无进行该公司有关股份的庄家活动。本公司员工均非该
上市公司的雇员。
免责条款
证券价格有时可能非常波动。证券价格可升可跌，甚至变成毫无价值。买卖证券未必一定能够赚取利润，反而可能会招致损
失。
本研究报告内容既不代表国信证券（香港）的推荐意见，也并不构成所涉及的个别股票的买卖或交易要约。国信证券（香港）
或其集团公司有可能会与本报告涉及的公司洽谈投资银行业务或其它业务（例如配售代理、牵头经办人、保荐人、包销商或
从事自营投资于该股票）。国信证券（香港）不排除其员工有个人投资于本报告内所提及的上市法团。
报告中的资料均来自公开信息，我们力求准确可靠，但对这些信息的正确性、公正性及完整性不做任何保证。本报告没有考
虑到个别客户特殊的投资目标、财务状况或需要，并不构成个人投资建议，客户据此投资，责任自负。客户在阅读本研究报
告时应考虑报告中的任何意见或建议是否符合其个人特定状况。本报告并不存在招揽或邀约购买或出售任何证券的企图。
本报告仅向特定客户传送，未经国信证券香港书面授权许可，任何人不得引用、转载以及向第三方传播，否则可能将承担法
律责任。研究报告所载的资料及意见，如有任何更改，本司将不作另行通知。在一些管辖区域内，针对或意图向该等区域内
的市民、居民、个人或实体发布、公布、供其使用或提供获取渠道的行为会违反该区域内所适用的法律或规例或令国信证券
（香港）受制于任何注册或领牌规定，则本研究报告不适用于该等管辖区域内的市民、居民或身处该范围内的任何人或实体。
Guosen Securities (HK)
20