Nationwide power sector investment in 1-11M2020 reached RMB809.9 bn, up YoY by 23,0%, Of which, power engineering investment went up YoY by 68,2% to RMB415.7 bn while power grid investment was down YoY by 4.2% to RMB394.2 bn. During the period, thermal power investment was down 15.3% YoYr while investment in hydro, nuclear and wind power surged YoY by 33.0%, 7.5% and 141,1%, respectively. Investment in wind power in China in the first 11 months broke the previous historical record by hitting RMB215.1 bn, which nearly doubled from the RMB 120 bn milestone recorded back in 2015 (full year)。 We expect that the majority of power engineering investment in China in next decade will focus on renewables.

Net earnings in the first 3 quarters of 2020 surged 29.6% YoY to RWIB1.342 mn, in line with our expectation. The Company's net profit during 1-3Q2020 met our expectation and was approximately 74.1% of our current full-year earnings forecast for 2020. Quarterly earnings in 3Q202C went up YoY by 26.9% to RMB388 mn. The Company produced 17.94 GW of power equipment in 1-3Q2020r up YoY by 19.4%. New orders in 1-3Q2020 surged YoY by 49.9% to RMB39.16 bn.

We reiterate the "Buy" investment rating and further raise our TP to HK$8.50. We remain positive on the outlook of Dongfang Electric. Our EPS estimates from 2020 to 2022 are RMB0.581, RMB0.757 and RMB0.923, respectively. The new TP corresponds to 12.4x/ 9.5x/ 7,8x 2020-2022 PER or 0,7x/ 0.7x/ 0.7x 2020-2022 PBR, respectively