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Analyst Research Report Snapshot


Initiating Coverage of Ruifeng Renew (HK: 0527) with Buy rating and HK$2.50 target




Greenridge Global


09 Jun 2014





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Key Points Management has been opportunistic in its M&A dealings, strategically shedding off legacy assets and acquiring interests in energy-related businesses, including a roll-up of Hongsong with long-deferred payments, all of which better position the Company for future growth. The Company’s wind farm operations currently have an installed capacity of 398.4MW, which is expected to increase to 1,190.4MW by the end of 2017. Hongsong has been in operation for 13 years and is strategically tied to Goldwind (HK:2208), who sold its first turbines to Hongsong. As a result, the Company has and is expected to continue to enjoy a small discount to market prices on future turbine orders. Management believes it will be able to fund most of its wind capacity increases through bank debt at an interest rate near the PBOC rate. All new wind turbine installations at both Hongsong and Langcheng will pay no taxes during the first three years of operation and pay 12.5% for the next three years before paying the full corporate rate. The Chinese government is pushing for the continued development of wind power, having all wind turbines grid connected and expanding the grid across China. Each of these focuses should benefit the Company’s wind power and grid construction businesses.

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