Jinwu Financial News | According to Guoyuan International Development Research Report, Xinyi Energy (03868) achieved revenue of HK$2,517 billion in 2023, an increase of 8.7% over the previous year; net profit attributable to shareholders was HK$993 million, up 2.2% year on year. The basic profit per share was HK12.56 cents, and the annual dividend was HK6 HK cents. The company's revenue growth mainly comes from the increase in power generation due to the contribution of newly acquired power plants. The company sold 3,817.6 GWH of electricity during the period, up 19.6% year on year; profits only increased slightly, mainly due to increased financing costs due to rising overseas interest rates and increased income tax expenses.
According to the bank, the company aims to acquire 700-1000 MW of power plants in 2024, and the scale is growing steadily; it will expand domestic bank loans in the first half of 2023, and interest rates on long-term bonds are less than 3%, which has a clear advantage over offshore lending rates. By the end of 2023, 13.3% of total bank loans were denominated in RMB, and the net debt ratio was 42.3%, which was significantly lower than the industry average, and the financial situation remained stable. In the future, the company will mainly use domestic bank financing to meet its capital requirements for new acquisitions and increase the share of domestic financing.
The bank updated the company's target price to HK$1.32, which is equivalent to 9 times and 7.6 times PE in 2024 and 2025. There is room for a 13% increase in the target price compared to the current price, giving it a holding rating.