The average target price of 000875.SZ is 6.7 and suggests 26% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 6.7. This translates into 26% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 6.7. This suggests 26% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

Jilin Electric Power Co.,Ltd. engages in the power generation and heating businesses in China. The company produces, distributes, places, and sells electric power; produces and sells civilian and industrial heat; develops and constructs power stations; and offers after services. It generates electricity from thermal power, wind power, and photovoltaic sources. The company was founded in 1993 and is based in Changchun, China.

China

Jilin Electric Power Co.,Ltd.

Utilities

The company pays dividends irregularly. There have only been a few years with dividend payments in the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are somewhat mixed. In the past 12 months, the dividend yield has been moderate and on par with its peers. 

000875.SZ reported revenue of CNY 13 655mn in the last 12 months, down 0% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 12% from FY24 to CNY 0.35. Market expects EPS to reach CNY 0.40 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. When measured against its worldwide peers from the same industry (as shown above), the stock has been weaker, underperforming by 9ppts. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported strong EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 31.9% in the last 12 months, a decline from 41.6% in FY23. 

Historically, 000875.SZ has reported average net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 8.1%, a growth from 6.3% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 1.3% in the last 12 months, an increase from 1.2% in FY23. The market analysts predict that RoA will be 1.2% in FY24, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) grew to 1.8%, below the peers. The consensus estimate for FY24 for RoCE is 4.1%, again behind the peers. 

Jilin Electric Power Co.,Ltd. reported a return on equity (RoE) of 7.6% in the last 12 months, down from 7.9% in FY23. The market consensus projects an RoE of 7.7% in FY24, again behind its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.6 in the past several years. This ratio implies a weak shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

000875.SZ boasts high trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity is usually stable and remains extremely favourable on the days with the lowest activity. However, please consider that under highly turbulent market conditions, the trading volume tends to decrease significantly. 

No other major risks have been identified.

The risk of default is moderate. We note robust profitability, among the positive credit factors. Among the negative credit factors, we point to slow historical revenue growth, negligible return on capital, excessive margin volatility, poor working capital management, weak debt servicing capacity, and an unfavourable capital structure.

In highly turbulent market conditions, 000875.SZ is not volatile. In other words, the stock will fall far less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be very low. 

In normal market circumstances, 000875.SZ is as volatile as an index. Put differently, without outstanding market volatility or shocking company news, the stock's price will move with the index. The stock's losses on its worst days (less than 1-5% of the time) will range from low to mild. 

Based on key historical and expected multiples, the stock is fairly valued relative to its peers. In particular, the stock is reasonably priced on P/E, of fair value on EV/EBITD. 

Jilin Electric Power Co.,Ltd.

CN¥ 5.48

6

Jilin Electric Power Co.,Ltd.

CN¥ 5.48

6

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

CN¥ 5.48

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