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

Fundamentals

Undervalued with proven track record.


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


Market Performance


7 Day Return

2.1%

SEHK:958

1.7%

HK Renewable Energy

3.3%

HK Market


1 Year Return

-22.7%

SEHK:958

-14.6%

HK Renewable Energy

-12.3%

HK Market

958 underperformed the Renewable Energy industry which returned -14.6% over the past year.

958 underperformed the Market in Hong Kong which returned -12.3% over the past year.


Share holder returns

958IndustryMarket
7 Day2.1%1.7%3.3%
30 Day-3.4%-3.8%-8.0%
90 Day0%-1.4%-5.5%
1 Year-20.9%-22.7%-11.9%-14.6%-9.2%-12.3%
3 Year-27.4%-31.7%-13.2%-21.3%11.5%0.8%
5 Year-25.5%-31.5%-42.9%-53.1%6.7%-10.5%

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 based on future cash flows and its price relative to the stock market?

50%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Huaneng Renewables's share price is below the future cash flow value, and at a moderate discount (> 20%).

Huaneng Renewables's share price is below the future cash flow value, and at a substantial discount (> 40%).


Price Based on Earnings

Huaneng Renewables is good value based on earnings compared to the HK Renewable Energy industry average.

Huaneng Renewables is good value based on earnings compared to the Hong Kong market.


Price Based on Expected Growth

Huaneng Renewables is good value based on expected growth next year.


Price Based on Value of Assets

Huaneng Renewables is overvalued based on assets compared to the HK Renewable Energy industry average.


Next Steps

Future Growth

How is Huaneng Renewables expected to perform in the next 1 to 3 years based on estimates from 25 analysts?

8.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Huaneng Renewables's revenue is expected to grow by 9.7% yearly, however this is not considered high growth (20% yearly).

Huaneng Renewables's earnings are expected to grow by 8.1% yearly, however this is not considered high growth (20% yearly).

Huaneng Renewables's revenue growth is positive but not above the Hong Kong market average.

Huaneng Renewables's earnings growth is positive but not above the Hong Kong market average.

Huaneng Renewables's earnings growth is expected to exceed the low risk savings rate of 2%.


Earnings per Share Growth Estimates


Future Return on Equity

Huaneng Renewables is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

How has Huaneng Renewables performed over the past 5 years?

24.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Huaneng Renewables has delivered over 20% year on year earnings growth in the past 5 years.

Huaneng Renewables's 1-year earnings growth is less than its 5-year average (2.1% vs 24.9%)

Huaneng Renewables's earnings growth has exceeded the HK Renewable Energy industry average in the past year (2.1% vs -0.1%).


Return on Equity

Huaneng Renewables has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Huaneng Renewables used its assets more efficiently than the HK Renewable Energy industry average last year based on Return on Assets.


Return on Capital Employed

Huaneng Renewables has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Huaneng Renewables's financial position?


Financial Position Analysis

Huaneng Renewables's short term (1 year) commitments are greater than its holdings of cash and other short term assets.

Huaneng Renewables's long term commitments exceed its cash and other short term assets.


Debt to Equity History and Analysis

Huaneng Renewables's level of debt (91%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has been reduced over the past 5 years (255.2% vs 91% today).

Debt is well covered by operating cash flow (28.8%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 3.2x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is not covered by short term assets, assets are 0.6x debt.


Next Steps

Dividend

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

3.30%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Huaneng Renewables's pays a higher dividend yield than the bottom 25% of dividend payers in Hong Kong (2.27%).

Huaneng Renewables's dividend is below the markets top 25% of dividend payers in Hong Kong (6.12%).

Whilst dividend payments have been stable, Huaneng Renewables has been paying a dividend for less than 10 years.

Dividend payments have increased, but Huaneng Renewables only paid a dividend in the past 6 years.


Current Payout to Shareholders

Dividends paid are thoroughly covered by earnings (7.4x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be well covered by earnings (6.5x coverage).


Next Steps

Management

What is the CEO of Huaneng Renewables's salary, the management and board of directors tenure and is there insider trading?

1.6yrs

Average management tenure


CEO

Shiguang Cao (50yo)

2.4yrs

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

Shiguang's remuneration is lower than average for companies of similar size in Hong Kong.

Shiguang's compensation has increased by more than 20% in the past year whilst earnings grew less than 20%.


Management Age and Tenure

1.6yrs

Average Tenure

50yo

Average Age

The average tenure for the Huaneng Renewables management team is less than 2 years, this suggests a new team.


Board Age and Tenure

2.4yrs

Average Tenure

54yo

Average Age

The average tenure for the Huaneng Renewables board of directors is less than 3 years, this suggests a new board.


Insider Trading

No 3 month open market individual insider trading information.


Recent Insider Transactions

SellCN¥1,110,72015 Aug 19
JPMorgan Chase & Co, Brokerage and Securities Investments
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Max PriceCN¥2.21
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Ownership Breakdown


Management Team

  • Gang Lin (54yo)

    Chairman

    • Tenure: 2.4yrs
    • Compensation: CN¥1.10m
  • Yan Shi (51yo)

    • Tenure: 0.0yrs
  • Shiguang Cao (50yo)

    President & Executive Director

    • Tenure: 2.4yrs
    • Compensation: CN¥1.07m
  • Minggang Wen (49yo)

    CFO, Chief Accountant & Executive Director

    • Tenure: 1.4yrs
    • Compensation: CN¥702.55k
  • Tao Zhu (42yo)

    Company Secretary

    • Tenure: 0.8yrs

Board Members

  • Jian Huang (57yo)

    Chief Supervisor

    • Tenure: 7.8yrs
  • Gang Lin (54yo)

    Chairman

    • Tenure: 2.4yrs
    • Compensation: CN¥1.10m
  • Xinmin Dai (58yo)

    Non-Executive Director

    • Tenure: 2.4yrs
  • Kui Wang (52yo)

    Non-Executive Director

    • Tenure: 5.0yrs
  • Shiguang Cao (50yo)

    President & Executive Director

    • Tenure: 2.4yrs
    • Compensation: CN¥1.07m
  • Minggang Wen (49yo)

    CFO, Chief Accountant & Executive Director

    • Tenure: 1.4yrs
    • Compensation: CN¥702.55k
  • Ji Zhai (58yo)

    Non-Executive Director

    • Tenure: 1.0yrs
  • Qi Hesheng

    Independent Non-executive Director

    • Tenure: 0.2yrs
  • Xiao Zhu

    Independent Non-executive Director

    • Tenure: 0.2yrs
  • Raymond Woo

    Independent Non-executive Director

    • Tenure: 0.0yrs

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$20.816b
  • 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 capaci ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/08/22 12:50
End of Day Share Price2019/08/22 00:00
Earnings2019/03/31
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.