Main points of investment

Profits in 2020 grew by 11.4% year-on-year, slightly exceeding expectations:

In 2020, the company achieved income of about 2 billion yuan, an increase of 9.0% over the same period last year; profit attributable to shareholders was about 673 million yuan, an increase of 11.4% over the same period last year; basic earnings per share was 8.18 cents, with a proposed final dividend of 3 Hong Kong cents per share, with a dividend yield of 31.37% and a dividend yield of about 5%. The company's performance slightly exceeded expectations, mainly due to the implementation of the "asset exchange" strategy and the improvement of the efficiency of the operation of the power plant. During the period, a total of rights and interests were sold to install 643.7MW, reducing green power subsidy receivables and contract assets totaling RMB 856 million, effectively optimizing asset structure and reducing green power subsidy dependence.

In February 2021, wind power generation increased by 31.3%, with a good performance:

The electricity generation of equity in February 2021 was 456.91GWh, an increase of 17.65% over the same period last year. Among them, the power generation of wind power rights and interests was 438.12GWh, an increase of 24.32% over the same period last year. From January to February, the group's equity electricity generation was 928.64GWh, an increase of 23.74 per cent over the same period last year. Among them, the power generation of wind power rights and interests was 891.47GWh, an increase of 31.3% over the same period last year.

2021-2023 entered the stage of high-quality and rapid development:

By the end of 2020, the installed capacity of the company's operating rights and interests is about 2.4GW. At present, the project approved / obtained by the company has reached 2.24GW. The company aims to double the installed capacity of rights and interests to 4.8GW by 2023, and plans to add about 1GW every year, corresponding to its own capital expenditure of about RMB 11-1.5 billion. The company can fully meet the project development capital needs through asset sales and operating cash flow without additional financing. Through asset replacement, on the one hand, the dependence on green power subsidies has been greatly reduced, and at the same time, the quality and efficiency of the company's operating power stations will also be greatly improved. It is expected that the company will enter the stage of high-quality and rapid development from 2021 to 2023.

Maintain the buy rating with a target price of HK $0.72:

At present, the company's 2021 PE is about 4.8 times, PB is about 0.61 times, and the dividend yield is about 4.82%. The valuation advantage is obvious. We update the company's target price to HK $0.72, which is equivalent to 6 times PE and 0.9 times PB in 2021. The target price has 26% room to rise from the current price, and the buy rating is maintained.