CH ENERGY ENG (3996.HK) Exceed intended newly signed contracts, proportion of non-power business further increase February 5, 2020 140

PSR Recommendation: ACCUMULATE Status: Maintained
Target Price: HKDHKD1.08

Newly Signed Contracts Updates in 2019

In 2019, the value of newly signed contracts of the company amounted to RMB520.398 billion, representing 108.3% of the value of the intended new contracts for the year with a YoY increase of 12.65%. Among them, in terms of geographical location, the value of newly signed domestic contracts amounted to RMB366.407 billion, accounting for approximately 70.41% of the total value of newly signed contracts with a YoY increase of 14.56%, whereas the value of newly signed overseas contracts is equivalent to RMB153.991 billion, accounting for approximately 29.59% of the total value of newly signed contracts with a YoY increase of 8.35%. Among them, in terms of business segments, the value of newly signed contracts of the power business amounted to RMB300.016 billion, accounting for approximately 57.65% of the total value of newly signed contracts with a YoY increase of 7.79%, whereas the value of newly signed contracts of nonpower business amounted to RMB220.381 billion, accounting for approximately 42.35% of the total value of newly signed contracts with a YoY increase of 20.02%. As a summary, the proportion of newly signed contracts for non-power business further increased, while the proportion of newly signed contracts for international business decreased slightly. We believe that it will benefit the performance of gross profit margin and further accelerate the transformation of domestic business to the non-power market.

About the author

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Leon Duan
Investment Analyst

Bachelor Degree in Shandong University of Science, and Master Degrees in Chinese University of Hong Kong Faculty of Science and City University of Hong Kong College of Business. Currently cover Pharmaceuticals and Environmental Protection sectors, good at combining analysis with industry prospects and company fundamentals.

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