DBS has lowered the price forecast of wind energy and solar energy for China Longyuan (00916) for the 2024 fiscal year by 3% to 7%.
According to the Economic Digest APP, DBS released a research report stating that it maintains a "hold" rating for China Longyuan (00916", based on more supportive policies addressing the power limit issue and the downward trend in electricity prices. The target price was raised from 6.3 Hong Kong dollars to 6.5 Hong Kong dollars. It also lowered the price forecast for wind energy and solar energy for the company's 2024 fiscal year by 3% to 7% and reduced the electricity generation forecast by 6.5%. Excluding impairment losses, it also cut profit forecasts for the 2024 and 2025 fiscal years by 16% and 14% respectively.
The bank predicts that China Longyuan will increase its capacity by 20% and 18% year-on-year for the 2024 and 2025 fiscal years respectively. However, due to limited wind resources and high wind abandonment rates, the bank estimates that electricity generation will only increase by 6% and 14% year-on-year for the 2024 and 2025 fiscal years respectively. Additionally, based on lower electricity prices and increased costs, the bank predicts that revenue and net income (excluding impairments) for the 2024 fiscal year are expected to decline by 1% and 13% respectively, and are projected to recover by 7% and 9% in the 2025 fiscal year.
