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<Research Report>BofAS Lowers TP of CHINA LONGYUAN (00916.HK) to $6.1; 2023 Results Miss
Recommend 9 Positive 11 Negative 9 |
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BofA Securities noted in a report that CHINA LONGYUAN (00916.HK) achieved a net profit of RMB6.4 billion last year, 8% lower than the broker's forecast, mainly due to higher other operating expenses, or impairments. This implied that LONGYUAN's net profit fell sharply to RMB141 million in 4Q23 from RMB1.1 billion in 3Q23. Without a one-off subsidy like in 2022, the company's free cash flow reverted to minus RMB10 billion last year, dragging down the company's cash balance to RMB4.5 billion. Based on last year's results, the broker reduced its earnings per share forecast for LONGYUAN by RMB1 cent each to RMB1.05 and RMB1.4 for 2024 and 2025 respectively, and lowered its wind power tariff forecast to a decline of 4-5%. BofAS dropped its target price on LONGYUAN H-shares from $7.5 to $6.1 and maintained its Neutral rating, citing the company's valuation falling to less than 5x 2024 projected P/E, as well as its track record of outperforming its peers in terms of subsidy collection. AAStocks Financial News |
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