Key Takeaways
Huatai Securities raised its target price for China Longyuan Power Group Corp. (00916.HK) to HKD 8, maintaining a 'Buy' rating despite a reported 15 percent drop in first-quarter profit.
The brokerage cited expectations for marginally improving wind power tariffs and higher-than-expected growth in installed capacity as the primary drivers for the revision in a note to clients.
China Longyuan’s first-quarter net profit fell to RMB 1.624 billion from the prior year, while revenue declined 4 percent to RMB 7.868 billion. Despite the weaker results, Huatai raised its net profit forecasts for 2026, 2027, and 2028 by 2.5 percent, 9.5 percent, and 10.1 percent respectively, projecting a three-year compound annual growth rate of 14 percent.
The upgrade suggests the long-term value from policy support and stabilizing returns in China's renewable sector may outweigh short-term weakness. For the company's A-shares (001289.SZ), Huatai lifted its target to RMB 18.9 from RMB 17.68, also maintaining a 'Buy' rating.
The positive revision from Huatai Securities signals that analysts may be looking past immediate earnings weakness toward future policy benefits for renewable energy producers. Investors will watch for second-quarter results to confirm if improving wind tariffs can reverse the profit decline.
This article is for informational purposes only and does not constitute investment advice.
