The Zhitong Finance App learned that BOC International released a research report stating that maintaining the “buy” rating of Longyuan Electric Power (00916), on the premise that depreciation is likely to be reduced and that the project acquisition is likely to be partially realized, the current valuation discount compared to the historical average is expected to narrow, and the target price will be raised to HK$9.03.

The bank believes that the market's expectations for the company have changed significantly, and investors believe that the possibility that the company can partially fulfill its promise to acquire the parent company's project has increased. The bank believes that even if in the end the company can only cash in on 7-10 gigawatts of acquisitions, the valuation should increase.

In terms of operation, the company's wind power generation capacity this year is still limited by weak wind speed and rising power limits, but since June-October of last year was already a low base, the bank believes that wind power generation may still improve year on year. The bank currently uses a conservative method to reflect the amount of impairment due to the company's “smaller exchange for larger” profit forecasts, but the company may also adjust the timing of the project transformation, and the impairment may be less than anticipated.