JPMorgan Updates Models Post Q1, Favors Goldwind, GCL Tech, and CGN Power Among Renewable H-Shares

Stock News05-19 14:04

Following the release of first-quarter results for mainland renewable energy stocks, JPMorgan has updated its financial models. In the upstream wind power sector, the firm continues to favor themes related to wind turbine exports and offshore wind development. It maintains an "Overweight" rating on the H-shares of Goldwind Science&Technology Co.,Ltd. (02208) and on Orient Cable (603606.SH). Driven by strong energy storage system demand and the AI data center (AIDC) energy storage theme, the firm is positive on Sungrow Power (300274.SZ) and Deye (605117.SH). Regarding solar manufacturers, JPMorgan remains selective, preferring companies with cost leadership and attractive valuations, thus favoring GCL TECH (03800) and Daqo New Energy (DQ.US). Among renewable power generators, the firm prefers CGN POWER (01816), which benefits from improvements in electricity pricing mechanisms, and China Yangtze Power (600900.SH), viewed as a defensive yield investment with stable tariffs.

JPMorgan stated that wind turbine exports to emerging markets and China's offshore wind development remain bright spots for domestic upstream wind companies. It is optimistic on Goldwind H-shares and Orient Cable, both rated "Overweight." However, due to Mingyang Smart Energy's (601615.SH) recent poor execution record, the firm maintains an "Underweight" rating on the stock.

In solar and energy storage, Sungrow Power remains the firm's top pick in this segment. JPMorgan believes more positive catalysts will emerge in the second half of the year alongside the development of energy storage supporting AI data centers. Deye is seen as a key beneficiary of regional energy security developments. For patient investors, Arctech Solar (688408.SH) should see an earnings recovery as shipments normalize and renewable energy development in the Middle East progresses. Despite the industry's downturn, Daqo and GCL TECH (both rated "Overweight") are considered to hold value. On the negative side, due to the industry downturn and valuation factors, the firm has assigned "Underweight" ratings to LONGi Green Energy (601012.SH), Tongwei (600438.SH), Maxeon Solar Technologies (300751.SZ), and Jingsheng Mechanical & Electrical (300724.SZ).

Regarding alternative energy power generators, JPMorgan expects the divergence in electricity pricing policies for different fuel types to persist into the second half of the year. The firm gives an "Overweight" rating to (nuclear power) CGN POWER but assigns "Neutral" ratings to (wind power) CHINA LONGYUAN (00916) and DATANG RENEW (01798). Several provinces have introduced policies to keep nuclear power tariffs stable through mechanisms like contracts for differences, while wind power tariffs are more affected by market-oriented reforms. China Yangtze Power (rated "Overweight") remains the firm's preferred defensive yield pick among hydropower companies.

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