Yamato: CHINA RES POWER (00836) makes progress in the spin-off of its new energy business, which is a positive catalyst.

Daiwa released a research report stating that CHINA RES POWER (00836) recently announced details of the plan to list its new energy subsidiary, China Resources New Energy, on the Shenzhen Stock Exchange. China Resources New Energy plans to issue 2.107 billion new shares, representing 16.2% to 18.19% of the expanded share capital, with the funds raised mainly used for new energy project development. Daiwa pointed out that this is a new development since the announcement of the spin-off plan in March 2023. It is expected that after the spin-off is completed, China Resources New Energy will continue to be a subsidiary of CHINA RES POWER, and CHINA RES POWER's shareholding will decrease from 100% to approximately 83.8%, with its performance continuing to be consolidated into the parent company's financial statements. The bank believes that the progress of the IPO is a positive catalyst, but the market has largely anticipated it. The focus is now on electricity price trends and profit visibility, maintaining a "hold" rating.