CGN Power’s 2022 Results in Line With Expectations; Visible Project Pipeline Supports Steady Growth Outlook

We maintain our fair value estimate of no-moat CGN Power at HKD 2.30 per share, after the company's in-line 2022 results and a minor tweak of our earnings forecast to incorporate the latest nuclear unit commissioning schedule over the next five years. We expect the company's net profit to grow at a five-year CAGR of 5.4% through 2027, up from an average of 1.6% annual growth in the prior three years, underpinned by visible project pipelines. We think the shares are slightly undervalued as of market close on March 16. Given the stable operation at nuclear power stations, we anticipate CGN Power's cash flows to remain robust. This should support a steady growth in absolute dividend payouts, and the company's proposed 2022 dividend of CNY 0.087 per share is yielding 5.2% presently.