Xinyi Energy (03868) Expect the central government to solve the electricity subsidy arrears once for all July 7, 2022 140

PSR Recommendation: ACCUMULATE Status: Initiation
Target Price: HKD4.74

2021 results in line with consensus
During 2021FY, the consolidated revenue of Xinyi Energy recorded an increase of 33.4% YoY
to HK$2,296.6 million. Profit for the year attributable to the equity holders surged by 33.7%
to HK$1,232.3 million. Basic earnings per share amounted to 17.33 HK cents, a growth of
28.9% YoY. With a final dividend of 10.0 HK cents per share, it represents 99.5% of the
distributable income. The full year dividend of 17.4 cents was in line with market consensus.
The Group’s revenue was mainly derived from two core businesses, namely, (1) solar power
electricity generation and (2) service fee income from the provision of the solar farm
operation and management services. The former includes Sales of electricity and Tariff
adjustment (represents amount received and receivable from the sales of electricity to the
customer pursuant to the government policy on subsidies of solar energy in respect of the
Solar Farm Business). Revenue contributed by the sales of electricity and the tariff
adjustment significantly increased by 55.8% YoY to HK$1,068.4 million (46.5% of total
revenue) and 18.6% YoY to HK$1,218.2 million (53.0% of total revenue) respectively. The
Group recorded HK$10.0 million from the solar farm operation and management services
rendered for the 2021FY, which represented for 0.4% of the total revenue.

About the author

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Eric Li
Analyst
Research

李浩然先生(Eric Li) 高級分析師 現任現為輝立証券持牌高級分析師,曾任職股票基金、家族辦公室及證券公司等,擁有多年的證券研究部門從業及投資經驗,並先後於香港最暢銷的財經媒體撰寫投資專欄。畢業於香港理工大學電子計算系。 Eric is currently a licensed research analyst at Phillip Securities. Prior to joining Phillip Securities, he has years of equity research and investment experiences in asset management company, family office and securities company. Meanwhile, he has written investment columns in Hong Kong`s best-selling financial media for years. He holds Bachelor of Arts in Computing from The Hong Kong Polytechnic University.

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