China Longyuan Power Group Corporation's wind power generation rose 19.7% year-on-year to 5584 gigawatt hours in April 2022. Estimated wind power utilization hours rose 4.2% to 218 hours in the current month compared with the same period last year. The wind power restriction rate in April 2022 rose 1.23 percentage points to 6.40% from a year earlier to 6.40%. The cumulative wind power restriction rate from January to April 2022 is about 4.76%.

The company's net profit attributable to equity holders fell 22.9% year-on-year to 2.258 billion yuan in the first quarter of 2022, in line with our expectations. Revenue in the first quarter of 2022 rose 4.8 per cent year-on-year to 10.422 billion yuan, down 33.7 percentage points from the same period in 2021. The year-on-year decline in net profit was mainly due to the decline in wind resources, which was overlaid with a restatement of the 2021 base of comparison. Excluding the impact of restatement, the company's revenue in the first quarter of 2022 rose 13.2% year-on-year, while the net profit attributable to equity holders fell 11.5% year-on-year, basically in line with our expectations.

We maintain our "collection" rating on China Longyuan Power Group Corporation but lower our target price to HK $21.00. At present, we predict that the company's earnings per share in 2022amp 2023 / 2024 will be RMB 0.850 / 1.007 / 1.138 respectively. The company has completed the 2.0 gigawatt wind power asset injection of the parent company group. The subsequent 21.4 gigawatt wind power asset injection is expected to be completed gradually in the second half of the 14th five-year Plan period. We believe that the company's advantages in terms of economies of scale and financing channels will give it a valuation premium over its peers. In addition, companies may also benefit from policy catalysis in terms of accelerated recovery of renewable energy subsidies. In view of the company's robust profit forecasts, we maintain the "collection" investment rating, but lower the target price slightly due to the cautious investment sentiment in the short term. Our current target price is equivalent to 21.0 times / 17.7 times / 15.7 times 2022 / 2023 / 2024 p / e.