China Longyuan Power Group (SEHK:916) Could Be Cheap As June Output Fell 7%

China Longyuan Power Group (SEHK:916) has drawn attention after reporting June 2026 operating data, with total power generation down 7.48% year on year and wind output declining 9.73% for the month.

See our latest analysis for China Longyuan Power Group.

Despite the weaker June generation data, China Longyuan Power Group’s HK$5.27 share price has seen a 1-day share price return of 1.54% and 7-day share price return of 4.77%, although the 30-day share price return is down 12.89% and the 1-year total shareholder return is down 23.82%. This suggests recent momentum is emerging after a tougher stretch.

If you are tracking how the power sector is shifting, it can be useful to see which other grid focused companies are on investors’ radars through our 34 power grid technology and infrastructure stocks

After a sharp pullback and a short burst of gains, the question for China Longyuan Power Group now is simple: does the recent weakness leave meaningful upside ahead, or has most of the easy move already played out in the stock price?

Preferred P/E of 8.7x: Is it justified for China Longyuan Power Group?

On simple earnings terms, China Longyuan Power Group trades on a P/E of 8.7x, which sits below the wider Hong Kong market but above its closest peer group average.

The P/E ratio compares the HK$5.27 share price to the company’s earnings per share and is a common way investors think about what they are paying for current and expected profits. For China Longyuan Power Group, a lower P/E than the broader Hong Kong market suggests the stock is not being priced as highly as many domestic companies relative to their earnings. However, the premium to the peer average hints that investors may still be willing to pay a bit more than for some similar renewable energy stocks.

Compared with the Hong Kong market P/E of 11.4x, the current 8.7x level points to a lower earnings multiple. The fair P/E estimate of 12.9x indicates a level the market could trend toward if sentiment and the assumptions behind that fair ratio are met. Against the Asian renewable energy industry average P/E of 15.3x, China Longyuan Power Group trades at a clear discount, which reinforces the idea that its earnings are being valued more cautiously than many regional peers.

Explore the SWS fair ratio for China Longyuan Power Group

Result: Price-to-earnings of 8.7x (UNDERVALUED).

However, China Longyuan Power Group still faces risks, including weaker power generation data and a multi-year share price decline that could weigh on sentiment.

Find out about the key risks to this China Longyuan Power Group narrative.

Another View on China Longyuan Power Group’s Valuation

While China Longyuan Power Group screens as good value on its 8.7x P/E, the SWS DCF model suggests a different story, with an estimated future cash flow value of HK$4.01 versus the current HK$5.27 share price, pointing to the stock trading above that cash flow based estimate.

This kind of gap can matter in practice, because it raises the question of whether earnings multiples or long term cash flow assumptions better capture the risks around debt, generation volatility, and returns on equity. Which lens do you trust more for China Longyuan Power Group right now?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out China Longyuan Power Group for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 213 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With mixed signals around China Longyuan Power Group’s recent performance and valuation, the picture is not one sided, so it makes sense to review the full breakdown of 3 key rewards and 2 important warning signs.

Looking for more investment ideas beyond China Longyuan Power Group?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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