China Longyuan (CLY)’s operating data in Oct 2023 was lower than our expectation, with a YoY decline of 10.99% in total power generation due to lower wind power generation. However, thermal power and other renewable power showed solid growth. CLY has implemented share buyback to demonstrate confidence in its operations. Additionally, as a pioneer of renewable power operator in China, CLY is expected to benefit from the collaborative efforts of China and the US to triple global renewable energy installed capacity by 2030. Consequently, we adjust our TP to HK$10.09 and　maintain BUY.
　　Oct operating data slightly missed our estimates. In Jan-Oct 2023, CLY　recorded accumulated power generation of 60,953,811 MWh, up by 5.87% YoY. In particular, wind power generation rose by 3.31% YoY, while its thermal power generation dropped by 3.07% YoY. During the same period, solar and renewable power maintained rapid growth of 139.05% YoY. In Oct 2023, CLY’s power generation declined by 10.99% YoY to 5,449,262MWh, dragged by lower wind power generation which declined by 19.59% YoY.
　　However, thermal power and other renewable power remained solid growth, up by 15.57% YoY and 162.92% YoY.
　　CLY previously approved and implemented a resolution to repurchase　H shares. The share repurchase will be carried out in multiple stages, with the price not exceeding 5% of the average closing price of the company's H shares in five trading days prior to the repurchase. The repurchase quantity will not exceed 10% of the total H shares issued. In Nov 2023, CLY repurchased 3.58mn H shares (accounted for 0.0427% of existed issued shares）at a price range of HK$ 6.07-6.43/share, totalling HK$22.5mn. CLY plans to continue the share buyback to demonstrate confidence in its operations and regard the current H-share price as attractive.
　　CLY as the pioneer of renewable power operator in China will benefit from China-US collaboration in tripling renewable energy capacity by 2030 under the Sunnylands Statement. China and the US worked jointly　in The Sunnylands Statement to address the climatic crisis and strive to triple global renewable energy capacity by 2030. CLY is the pioneer of renewable power operator in China, and its new energy installation process and development may be further sped up under the Sunnylands Statement. For 2023E, we believe CLY may achieve its previous newly-added installed capacity target of 5500MW.
　　TP was adjusted to HK$10.09, maintain BUY. Thanks to the strong　operating data of Jan-Oct 2023, we lowered our estimated wind power utilization hours and solar power utilization hours, and updated our predicted power generation to 78,575GWh/92,919GWh/109,795GWh for 2023E/24E/25E. Therefore, we slightly adjusted our TP to HK$10.09 for CLY-H, based on 10x FY24E PE(close to 3-year avg.PE) and rolling FY24E EPS of RMB1.09. Maintain BUY.