Zhejiang Provincial New Energy Investment Group Co., Ltd. engages in the construction of water conservancy and hydropower projects in Zhejiang province, China. It is involved in the hydropower generation, water supply, water conservancy, and hydropower engineering construction; sea reclamation; and industrial investment activities. The company has 13 hydropower stations with a total installed capacity of approximately 500,000 kilowatts. Zhejiang Provincial New Energy Investment Group Co., Ltd. is based in Hangzhou, China.

China

Zhejiang Provincial New Energy Investment Group Co., Ltd.

Energy

The company pays dividends from time to time. It has paid dividends in less than half the past ten years. Dividend per share (DPS) has grown yearly, and there is a clear trend. In the past 12 months, the dividend yield has been moderate and on par with its peers. On average, the company pays dividends annually. 

600032.SS reported revenue of CNY 4 886mn in the last 12 months, down 1% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 16% from FY24 to CNY 0.20. Market expects EPS to reach CNY 0.30 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Over the past six months the stock has exceeded the performance of this peer group by 0ppts and its growth decelerated by 15ppts in the past month. 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 very strong EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 46.2% in the last 12 months, a decline from 63.5% in FY23. 

Historically, 600032.SS has reported strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 9.8%, down from 15.5% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to 1.0%, below the peers. 

Another important profitability metric, return on assets (RoA), amounted to 0.9% in the last 12 months, a decrease from 1.4% in FY23. 

Zhejiang Provincial New Energy Investment Group Co., Ltd. reported a return on equity (RoE) of 3.9% in the last 12 months, down from 6.7% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.5 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.

600032.SS boasts high trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is usually stable and remains mildly favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. 

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 negligible return on capital, excessive margin volatility, poor working capital management, weak debt servicing capacity, inadequate interest coverage, and an unfavourable capital structure.

In highly turbulent market conditions, 600032.SS is not overly volatile. In other words, the stock will fall 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 low. 

In normal market circumstances, 600032.SS 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 limited to average. 

Based on key historical and expected multiples, the stock is overvalued relative to its peers. In particular, the stock is reasonably priced on P/E, 'expensive' on EV/EBITDA, overvalued on P/FCF. 

Zhejiang Provincial New Energy Investment Group Co., Ltd.

CN¥ 7.92

4

Zhejiang Provincial New Energy Investment Group Co., Ltd.

CN¥ 7.92

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

CN¥ 7.92

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