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China Power: Solid Performance Delivered In 2019

Tudor Invest Holdings profile picture
Tudor Invest Holdings


  • Net profit up 17%.
  • Dividend bumped up 18%, now yielding over 9%.
  • Transformation to greener energy on track.

Investment Thesis

In my last article on China Power International (OTCPK:CPWIF) dated 18th September 2019 titled "China Power Int: Get Paid 7.4% Whilst Waiting For Value To Be Unlocked", I asked if the stock offered good value or if it was a value trap.

During this market drawdown, on paper, it should be an even better value proposition.

Based on well-known and often used assessment matrixes such as Price/Earnings, Price/Book Value, and dividend yield, the company is looking very attractive. They could even be categorized as a growth company.

The company has published its 2019 Annual Report, so it is a good time to explore how they are progressing.

Highlights from 2019 Result

The combined total electricity sold by the company for the year ended 31 December 2019 amounted to 83,558,993 MWh which was an increase of 17.7% year on year.

Total electricity sold in 2019 increased by 17.75% compared with the previous year, and the revenue increased by 19.80%.

Net profit attributable to shareholders came in at RMB 1.28 billion, representing an increase of 16.94% from the previous year.

The dividend increased by 18% from RMB 0.11 to RMB 0.13

Source: China Power Int. 2019 Annual Report

We should look at a breakdown of how each different source of energy delivers the net profit.

Source: China Power Int. 2019 Annual Report

I often come across commentators here on SA that fervently criticize companies, such as Royal Dutch Shell (RDS.A) (RDS.B), which are transforming the company from a complete fossil-based source of income to include power generation and distribution, including renewable energy. The critics all are of the opinion that renewable energy is not a profitable business. Maybe some time back, it was not profitable but, clearly, looking at how much profit CPWIF generates (no pun intended) from renewable, such biases are clearly wrong.

This article was written by

Tudor Invest Holdings profile picture
Tudor Investment Holdings Private Limited is a Singapore based investment company. Its investments are in commercial real estate and managing a global portfolio of investments in equities and bonds.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am long China Power International, Hong Kong

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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