2020 operating results met our expectation. The revenue of Shanghai Electric in 2020 went up 7.7% YoY to RMB137.3 bn and net earnings to shareholders increased 7.3% YoY to RMB3,758 mn. The net profit of the Company in 2020 met our expectation and was approximately 97% of cur full-year earnings forecast for 2020. Following recording 17.6% YoY decline in net earnings in 1H2020. 2H2020 net profit of Shanghai Electric surged 35.1% YoY or 46.9% HoH to RMB2,236 mn, successfully offsetting the impact brought by the COVID-19 pandemic in 2020. Consolidated gross margin of in 2020 fell YoY by 2.0 ppt to 17.0% while net margin in 2020 stayed flat at 2.7%.

　　New orders in 2020 hit RMB185.55 bn, up YoY by 8.7%, In particular, new orders from energy equipment, industrial equipment and integrated services accounted for 40.8%, 24.7% and 34,5%, respectively. Orders on hand amounted to RMB276,09 bn at the end of 2020, up YoY by 14.7%, It is worth noting that wind power equipment contributed 15.7% of new orders and 12.9% of orders on hand, while energy storage equipment contributed 1.6% of new orders and 0.6% of orders on hand.

　　We reiterate the "Buy" investment rating and raise our TP to HK$3.35. We remain confident on the outlook of Shanghai Electric as it continues to evolve to capture new opportunities under the carbon neutrality national strategy. Our EPS estimates from 2021 to 2023 are RMB0.282, RMB0.328 and RMB0.362, respectively. The new TP of HK$3.35 corresponds to 10.Ox/ 8.5x/ 7.7x 2021-2023 PER or 0.6x/ 0.5x/ 0.5x 2021-2023 PBR, respectively.