Xiaomo: Longyuan Electric Power (00916) Valuation Office upgraded its 15-year low rating to “increase holdings”

The Zhitong Finance App learned that J.P. Morgan Chase released a research report saying that the stock price of Longyuan Electric Power (00916) has outperformed the national index for the same period by about 11% from the beginning of the year. The current price level valuation is only 0.5 times the predicted market account ratio for the 2027 fiscal year, which is at a low level in 15 years. According to Komo, although the company is facing rising abandonment rates and pressure to market-based reform of electricity prices, its strategic role in the national energy system is being strengthened, and the current valuation is very attractive. Therefore, the investment rating was raised from “neutral” to “increase”, and the target price remained unchanged at HK$7.

The bank expects that with the accelerated installation of energy storage systems from 2025 to 2026, continued growth in grid capital support in 2026, and a slowdown in the growth rate of new energy installations in 2026, the wind abandonment rate of Longyuan Electric Power is expected to improve, and the number of hours used by wind farms will rebound from the low level of 2026. In terms of electricity prices, the market-based policy for wind power and photovoltaic electricity prices was fully implemented in the first quarter of 2026. After experiencing the first full annual impact, it is expected that the downward pressure on electricity prices will ease somewhat from 2027. Xiaomo adjusted Longyuan's profit forecast for 2025 to 2027, ranging from 1% to an increase of 15%. Among them, adjusted earnings per share in 2027 increased 7.2% from RMB 0.55 to RMB 0.59.