Xinyi Energy Holdings Ltd
03868: XHKG (HKG)
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
HK$3.25 | Wbxv | Lzlxbpm |
Xinyi Energy Earnings: Change in Dividend Policy a Negative Surprise to Investors
Xinyi Energy’s first-half 2023 net profit of HKD 566.9 million, down 9.0% year on year, was below expectations. We believe the miss is mainly attributable to the depreciation of the Chinese yuan and more conservative assumptions on tariff adjustment. We cut our fair value estimate to HKD 2.64 from HKD 3.12 after updating our model assumptions. While the firm remains undervalued, we think share price performance will be weak in the near term, given negative investor sentiment after the disappointing change in the dividend policy.