A unique market position for global development; actively cooperating with state-owned enterprises to develop Vaillant Group International Holdings Limited (“Vaillant Group”) has a unique market position among Hong Kong stock companies. Currently, it mainly engages in (1) gas and diesel generator system integration and (2) gas distributed power generation in Southeast Asia and developing regions to meet local flexible and semi-permanent electricity demand. The company actively cooperates with state-owned enterprises to increase development opportunities. CITIC Co., Ltd. (267HK; unrated) is the company's second largest shareholder. Its wholly-owned subsidiary and Vaillant Group established the Tamar Weineng Energy Fund in 2018 to invest in the energy markets of countries along the “Belt and Road”. In February 2020, VPower Group also established a joint venture with China Technology Import & Export Group Co., Ltd., the general contractor of the project, to invest in a gas power generation project in Myanmar. The explosive rise in earnings in 2020 and 2021 Since the Myanmar joint venture project mentioned above will commence operation in the middle of this year, we anticipate an explosive increase in shareholders' net profit in 2020-2021. Even without counting the profit of Tamar Vaillant Energy Fund, we expect shareholders' net profit to rise from HK$280 million in 2019 to HK$1.37 billion in 2022, with a CAGR of 68.9% during the period. The year-on-year growth rates of shareholders' net profit in 2020-2021 reached 102.2% and 89.9%, respectively. The valuation is lower than that of fellow Vaillant Group's undervalued Hong Kong stock peers. The company's price-earnings ratio in 2021 was 7.7 times, which were both 16.7 times and 14.4 times lower than CLP Electric Holdings (2 HK; unrated) and Electric Energy Industry (6 HK; unrated), respectively. For the first time, a “buy” rating was given. The target price is HK$5.30, and there is room for growth of 64.1%. Based on discounted cash flow analysis, we set a target price of HK$5.30 for Vaillant Group, which corresponds to 12.6 times the 2021 price-earnings ratio and 64.1% room for growth. We covered it for the first time and gave it a “buy” rating. Risk warning: (1) project development delays; (2) tight natural gas supply; (3) policy risks; (4) slowdown in electricity demand