The country's new solar installed capacity in 2019 is expected to be between 35 and 45 gigawatts. On July 11, the National Energy Administration issued a notice on the results of the 2019 national subsidy bidding for photovoltaic power generation projects. The total installed capacity of the projects on the subsidy list reached 22.79 gigawatts. We expect new domestic solar installations in 2019 to be between 35 and 45 gigawatts, 15 gigawatts higher than our earlier forecast range. The number of new domestic solar installations in the first half of 2019 was only 11.65 gigawatts, down 55% from the previous year.

The National Energy Administration and the National Development and Reform Commission jointly issued a list of the first batch of affordable Internet access projects for wind power and photovoltaics in 2019.

The list of the first batch of affordable Internet projects for wind power and photovoltaic power generation in 2019 was issued in May 2019, with a total installed capacity of 20.76 gigawatts. The 20.76 gigawatt affordable grid project for wind power and photovoltaics is expected to be put into operation between 2019 and 2021. The PV power project that is expected to be put into operation in 2019 is only 4.73 gigawatts.

The potential acquisition by China Huaneng Group is expected to significantly improve GCL New Energy's profitability. The implementation of this potential deal will lead to a change in GCL's control of New Energy. We believe that the probability of success of this potential deal is high, mainly because GCL Group is currently working to reduce its own leverage.

We lowered our target price slightly to HK$0.45 but maintained our “buy” investment rating. Our earnings per share forecast for 2019 to 2021 is RMB 0.0651/0.0591/0.0645, respectively. Our new target price is equivalent to 6.0 times /6.7 times /6.1 times the price-earnings ratio from 2019 to 2021 or 1.0 times /0.9 times /0.8 times the net price-earnings ratio from 2019 to 2021.