Business results as expected

The Company released its 2014 annual report of business results. Over the year, the Company registered revenues of RMB8.729 billion, up by 39.55% yoy; earnings before interest and tax (EBIT) of RMB2.33 billion, up by 14.36% yoy; and dividends by shareholders of RMB1.208 billion, up by 5.48% yoy. The increases were mainly attributed to the Future Science City and Jing Xi and other projects being put into operation, contributing favorably to the result. Its EPS was RMB0.18.

Gas-fired generation units were put into operation

As the Future Science City, Jing Xi and Gao An Tun projects have been put into operation one after another, the Company's capacity of installed gas-fired generation units has risen to 4,436MW, increasing by 119% from 2,028MW at the end of 2013. Revenue from selling gas power and heat power has increased by 55% and 47% yoy respectively. As the newly installed units were put into production in the second half of 2014, it is expected that they will perform better this year. As for Gao An Tun project, due to the problem of booster station, it won`t realize full capacity until the second half of this year. In short, result growth will be released gradually.

Other businesses were on steady growth

The Company achieved 1,815MW of the installed capacity of wind-driving power from 1,699MW at the end of 2013. In 2014, the Company had 150MW capacity approved in addition to travel permits of 450MW. It had a total of 2,090 hours available for generation on a yearly basis, 185 hours more than national average level. It is expected that the wind power business will maintain slow growth in the near future. The installed capacity of photovoltaic generation increased from 50MW at the end of 2013 to 270MW and is expected to hit 470MW by the end of 2015.

Valuation

The Company's gas power generation business is performing well and result will be gradually released. Photovoltaic generation business is likely to experience rapid development in the coming years. The Company has started construction of its garbage power generation plant. The Company is expected to report a significant increase of results this year. We set a target stock price of HK$4.8 and maintain “Buy” rating, equal to 12 times of anticipated PE ratio in 2015. (Closing price as at 5 May 2015)

Financials

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