Initiate with "Buy": We are positive on China Datang Corporation Renewable Power ("DTR" or the "Company") as the Company is on track to break through the growth constraints that have long weighed on its valuation. We forecast growing 2022-2024 EPS of RMB0.265 (+47.2% yoy)/ RMB0.316 (+19.2% yoy)/ RMB0.480 (+51.9% yoy), respectively. We set our TP at HK$3.34 based on 9.2x 2023 PER.
　　Where we differ: The market generally expects DTR to have lackluster growth due to several constraints, notably unclear positioning within China Datang Corporation ("CDC" or the "Group") and undesirable asset performance. We, on the other hand, see DTR as better positioned under "Secondary Entrepreneurship" to break through the group-level constraints for growth, while wind farm repowering has become increasingly feasible for the Company to both unlock capacity growth and turn around ass
　　Better positioned to break through growth constraints: We see easing constraints for growth at the group level, driven by "Secondary Entrepreneurship", an unprecedented reform carried out by CDC to reshape the Group's governance and pave way for accelerated development in support of China's dual carbon goal.
　　We believe the JV formed recently between DTR and Datang Xinjiang showed increasing clarity on DTR's positioning within the Group, while DTR's faster speed in obtaining development quota since 2021 is also supportive of our view of easing growth constraints. Meanwhile, with more wind capacities of DTR reaching the age feasible for repowering, the Company's earning profile is set for a fundamental change. A relatively high proportion of old wind farm has long dragged DTR's asset efficiency, and the Company is expected to have around 4.0 GW of wind capacities aged over 15 years by 2025. Wind repowering, on average, can more than double the generation capacity and triple the power output of a repowered site.
　　Catalysts: Strong installed capacity growth, more clarity on DTR's positioning within the Group, and accelerated collection of renewable subsidies.
　　Risks: Delay in project roll-out, higher-than-expected raw material costs, and extreme weather conditions.