China Suntien Green Energy Corp Ltd Class H

00956: XHKG (HKG)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	HK$5.10	Dvlw	Qdrwnycc

China Suntien Earnings: Resilient Natural Gas Business Offsets Weakness in New Energy Segment

Chokwai Lee

Apr 1, 2024

No-moat China Suntien Green Energy's 2023 net profit of CNY 2.2 billion, down 3% year on year, beat our expectation. This was largely due to stronger earnings from the natural gas business that offset the softer performance of the renewable energy segment. We raise our 2024-26 earnings forecasts by 1%-6% to factor in the better results, and we increase our fair value estimate to HKD 3.78 per share from HKD 3.66. Trading at 2024 price/earnings of around 5 times and over 8% dividend yield, we think the shares are attractive, underpinned by a five-year net profit compound annual growth rate of 12%.

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