JP Morgan: Longyuan Power Group Corporation (00916) valued at low levels in 2015, rating upgraded to "hold"

JPMorgan released a research report stating that China Longyuan Power Group Corporation (00916) has underperformed the national index by about 11% since the beginning of the year, with its current price level valuation only equivalent to 0.5 times the forecast price-to-book ratio for the fiscal year 2027, at a low level in the past 15 years. JPMorgan pointed out that although the company is facing an increase in wind abandonment rate and pressure from electricity price marketization reforms, its strategic role in the national energy system is strengthening. The current valuation is very attractive, hence the investment rating has been raised from "Neutral" to "Buy", with the target price maintained at 7 Hong Kong dollars. The bank expects that with the accelerated installation of energy storage systems from 2025 to 2026, the continuous growth in grid capital expenditure in 2026, and the slowdown in new energy installation growth in 2026, China Longyuan Power Group Corporation's wind abandonment rate is expected to improve. The utilization hours of wind farms will rebound from the lows of 2026. In terms of electricity prices, the wind and photovoltaic electricity price marketization policy will be fully implemented in the first quarter of 2026. After experiencing the impact of the first complete year, it is expected that the downward pressure on electricity prices will ease from 2027. JPMorgan adjusted Longyuan's profit forecast for 2025 to 2027, with a range of a 1% decrease to a 15% increase. Among them, the adjusted earnings per share for 2027 was raised by 7.2% to 0.59 RMB.