SEHK:958

Stock Analysis Report

Executive Summary

Huaneng Renewables Corporation Limited, together with its subsidiaries, generates and sells wind power and solar power in the People’s Republic of China.


Snowflake Analysis

Solid track record and good value.


Similar Companies

Share Price & News

How has Huaneng Renewables's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 958 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

958

0.8%

HK Renewable Energy

1.1%

HK Market


1 Year Return

28.0%

958

-30.4%

HK Renewable Energy

-21.6%

HK Market

Return vs Industry: 958 exceeded the Hong Kong Renewable Energy industry which returned -23.9% over the past year.

Return vs Market: 958 exceeded the Hong Kong Market which returned -10.2% over the past year.


Shareholder returns

958IndustryMarket
7 Day0%0.8%1.1%
30 Day-1.3%-10.0%-10.2%
90 Day5.0%-20.3%-16.1%
1 Year31.0%28.0%-28.0%-30.4%-18.8%-21.6%
3 Year26.8%19.3%-33.7%-39.9%-3.1%-12.8%
5 Year23.6%13.7%-59.9%-66.1%-13.5%-27.3%

Price Volatility Vs. Market

How volatile is Huaneng Renewables's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Huaneng Renewables undervalued compared to its fair value and its price relative to the market?

34.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 958 (HK$3.15) is trading below our estimate of fair value (HK$4.83)

Significantly Below Fair Value: 958 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 958 is poor value based on its PE Ratio (8x) compared to the Renewable Energy industry average (8x).

PE vs Market: 958 is good value based on its PE Ratio (8x) compared to the Hong Kong market (9.9x).


Price to Earnings Growth Ratio

PEG Ratio: 958 is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: 958 is overvalued based on its PB Ratio (1x) compared to the HK Renewable Energy industry average (0.5x).


Next Steps

Future Growth

How is Huaneng Renewables forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

10.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 958's forecast earnings growth (10.2% per year) is above the savings rate (1.6%).

Earnings vs Market: 958's earnings (10.2% per year) are forecast to grow slower than the Hong Kong market (11.8% per year).

High Growth Earnings: 958's earnings are forecast to grow, but not significantly.

Revenue vs Market: 958's revenue (10.4% per year) is forecast to grow faster than the Hong Kong market (9.7% per year).

High Growth Revenue: 958's revenue (10.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 958's Return on Equity is forecast to be low in 3 years time (13%).


Next Steps

Past Performance

How has Huaneng Renewables performed over the past 5 years?

21.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 958 has high quality earnings.

Growing Profit Margin: 958's current net profit margins (30.2%) are higher than last year (27.7%).


Past Earnings Growth Analysis

Earnings Trend: 958's earnings have grown significantly by 21% per year over the past 5 years.

Accelerating Growth: 958's earnings growth over the past year (23.9%) exceeds its 5-year average (21% per year).

Earnings vs Industry: 958 earnings growth over the past year (23.9%) exceeded the Renewable Energy industry 4.6%.


Return on Equity

High ROE: 958's Return on Equity (12.3%) is considered low.


Next Steps

Financial Health

How is Huaneng Renewables's financial position?


Financial Position Analysis

Short Term Liabilities: 958's short term assets (CN¥17.0B) do not cover its short term liabilities (CN¥32.5B).

Long Term Liabilities: 958's short term assets (CN¥17.0B) do not cover its long term liabilities (CN¥29.1B).


Debt to Equity History and Analysis

Debt Level: 958's debt to equity ratio (134.4%) is considered high.

Reducing Debt: 958's debt to equity ratio has reduced from 259.2% to 134.4% over the past 5 years.

Debt Coverage: 958's debt is not well covered by operating cash flow (18.4%).

Interest Coverage: 958's interest payments on its debt are well covered by EBIT (3.5x coverage).


Balance Sheet

Inventory Level: 958 has a high level of physical assets or inventory.

Debt Coverage by Assets: 958's debt is not covered by short term assets (assets are 0.4x debt).


Next Steps

Dividend

What is Huaneng Renewables's current dividend yield, its reliability and sustainability?

1.55%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 958's dividend (1.55%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.3%).

High Dividend: 958's dividend (1.55%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.4%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, 958 has been paying a dividend for less than 10 years.

Growing Dividend: 958's dividend payments have increased, but the company has only paid a dividend for 7 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (12.5%), 958's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 958's dividends in 3 years are forecast to be well covered by earnings (15.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average management tenure


CEO

Shiguang Cao (50yo)

2.92s

Tenure

CN¥1,073,000

Compensation

Mr. Shiguang Cao has been the President and Executive Director of Huaneng Renewables Corporation Limited since March 28, 2017 and served as its Chief Accountant since March 28, 2017. Mr. Cao joined Huaneng ...


CEO Compensation Analysis

Compensation vs Market: Shiguang's total compensation ($USD152.65K) is below average for companies of similar size in the Hong Kong market ($USD558.57K).

Compensation vs Earnings: Shiguang's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Gang Lin
Chairman2.92yrsCN¥1.10mno data
Shiguang Cao
President & Executive Director2.92yrsCN¥1.07mno data
Minggang Wen
CFO, Chief Accountant & Executive Director1.92yrsCN¥702.55kno data
Yan Shi
VP & General Counselno datano datano data
Tao Zhu
Company Secretary1.33yrsno datano data

2.1yrs

Average Tenure

50yo

Average Age

Experienced Management: 958's management team is considered experienced (2.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Gang Lin
Chairman2.92yrsCN¥1.10mno data
Shiguang Cao
President & Executive Director2.92yrsCN¥1.07mno data
Minggang Wen
CFO, Chief Accountant & Executive Director1.92yrsCN¥702.55kno data
Jian Huang
Chief Supervisor8.25yrsno datano data
Xinmin Dai
Non-Executive Director2.92yrsno datano data
Kui Wang
Non-Executive Director5.5yrsno datano data
Ji Zhai
Non-Executive Director1.5yrsno datano data
Hesheng Qi
Independent Non-executive Director0.67yrno datano data
Xiao Zhu
Independent Non-executive Director0.67yrno datano data
Kar Tung Woo
Independent Non-executive Directorno datano datano data

2.9yrs

Average Tenure

54yo

Average Age

Experienced Board: 958's board of directors are not considered experienced ( 2.9 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Huaneng Renewables Corporation Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Huaneng Renewables Corporation Limited
  • Ticker: 958
  • Exchange: SEHK
  • Founded: 2002
  • Industry: Renewable Electricity
  • Sector: Utilities
  • Market Cap: HK$33.285b
  • Shares outstanding: 10.57b
  • Website: https://www.hnr.com.cn

Number of Employees


Location

  • Huaneng Renewables Corporation Limited
  • No. 23A Fuxing Road
  • 10-11th Floor
  • Beijing
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
958SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDJun 2011
HR1DB (Deutsche Boerse AG)YesForeign Shares-Foreign ListedDEEURJun 2011
958SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDJun 2011
958SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDJun 2011
HREN.FOTCPK (Pink Sheets LLC)YesForeign Shares-Foreign ListedUSUSDJun 2011

Biography

Huaneng Renewables Corporation Limited, together with its subsidiaries, generates and sells wind power and solar power in the People’s Republic of China. As of December 31, 2018, it had an installed capacity of 11,964.8 megawatts. The company was founded in 2002 and is headquartered in Beijing, the People’s Republic of China. Huaneng Renewables Corporation Limited is a subsidiary of China Huaneng Group Co., Ltd. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/25 13:09
End of Day Share Price2020/02/17 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.