Morningstar

Xinyi Energy Holdings Ltd 03868

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Stock XHKG Rating as of
HK$1.03 +0.08 (8.42%)
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As of Delayed Price Closed

Company Report

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Xinyi Energy Remains Undervalued Despite Near-Term Challenges

Chokwai Lee

Xinyi Energy Holdings is the solar farm operation unit of its holding company Xinyi Solar, a leading solar glass manufacturer and solar farm developer in China. Unlike most solar power suppliers with integrated upstream solar project development, Xinyi Energy mainly acquires utility-scale ground-mounted solar projects and focuses on downstream solar farm operations. The company's unique business model largely shields it from construction risks and regulatory risks such as project approvals, leading to a more stable returns profile. Previously, the company aimed to distribute not less than 90% of its distributable income annually. However, Xinyi Energy changed its dividend policy in 2023—it now considers the firm’s financial resources and funding needs, with no fixed payout ratio.

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Price vs Fair Value

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03868 is trading at a 124% premium.
Price
HK$1.03
Fair Value
HK$3.35
Uncertainty
High
1-Star Price
HK$3.39
5-Star Price
HK$2.16
Economic Moat
Cqjj
Capital Allocation
Sbngyjjm

Bulls Say, Bears Say

Bulls

Growth in electricity consumption and China’s ambitious renewable targets driven by urgent need to reduce carbon emissions will favor Xinyi Energy’s offtake.

Bears

The shortfall in the government’s renewable energy fund has led to delays in subsidy collections.

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Trading Information

Previous Close Price
HK$0.95
Day Range
HK$0.92–1.03
52-Week Range
HK$0.66–1.59
Bid/Ask
HK$1.02 / HK$1.03
Market Cap
HK$8.51 Bil
Volume/Avg
29.2 Mil / 9.7 Mil

Key Statistics

Price/Earnings (Normalized)
10.26
Price/Sales
3.47
Dividend Yield (Trailing)
4.76%
Dividend Yield (Forward)
4.47%
Total Yield
4.76%

Company Profile

Listed in May 2019, Xinyi Energy is a spinoff from its holding company Xinyi Solar, and engages in solar farm operations in China. The company owns a portfolio of utility-scale ground-mounted solar farm projects, with total approved capacity of 3,650.5 megawatts by the end of 2023. Parent Xinyi Solar, a leading solar glass manufacturer and solar farm developer, retains about a 52% stake in Xinyi Energy.
Sector
Utilities
Industry
Utilities - Renewable
Stock Style Box
Mid Value
Total Number of Employees
387
Website
https://www.xinyienergy.com

Competitors

Valuation

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Metric
03868
01798
00836
Price/Earnings (Normalized)
 10.267.316.96
Price/Book Value
 0.650.821.15
Price/Sales
 3.471.231.01
Price/Cash Flow
 11.364.104.05
Price/Earnings
03868
01798
00836

Financial Strength

Metric
03868
01798
00836
Quick Ratio
 1.510.920.59
Current Ratio
 1.520.950.72
Interest Coverage
 3.862.915.52
Quick Ratio
03868
01798
00836

Profitability

Metric
03868
01798
00836
Return on Assets (Normalized)
 4.02%2.83%4.57%
Return on Equity (Normalized)
 6.48%16.04%17.35%
Return on Invested Capital (Normalized)
 5.67%4.56%6.57%
Return on Assets
03868
01798
00836

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