Longyuan completes 2,222MW of new wind projects in 2015

It's the company's highest ever.

China Longyuan completed 2,222MW of new wind projects in 2015, the highest in the company's history.

According to a research note from Jefferies, notably, the company previously disclosed it added 435MW, 150MW and 100MW of wind capacity in Jiangsu, Guizhou and Chongqing, respectively.

The company's average tariff increased by 1% YoY as the company benefited from a geographic mix shift; curtailment helps the company's effective tariff as it lowers the contribution from lower tariff regions.

Here's more from Jefferies:

Longyuan reported 2015 results with EPS increasing 13% YoY to Rmb0.36, in-line with our estimates. The company proposed a final dividend of Rmb0.072 per share. Wind power generation grew by just 11% YoY as deteriorating curtailment limited the impact of the company's capacity additions. We are encouraged by the recent policy announcements that curtailment should decline in the medium term though. We will provide an update post the analyst briefing.

2015 Results. Adjusted revenues increased by 5.5% YoY as the increase in wind power generation helped to offset the slight decline in coal-fired power generation. Operating expenses excluding service concession construction costs increased by a modest 3.6%. The company benefitted from the falling coal prices with the unit fuel cost declining by an estimated 19% YoY.

Repair and maintenance costs did increase by 18% YoY or a 58% HoH increase in the second half alone, as more wind turbines' warranty period expired. However, on a per watt basis, repair and maintenance costs increased by 3% YoY. Net finance expenses increased by a modest 2% YoY as we estimate the effective interest rate decline by ~60bps in 2015.

Net gearing down to 152% and is poised to de-lever. The company turned FCF positive in 2015 with net operating cash inflow of Rmb16.3bn and capex of Rmb16.2bn. With the 2,222MW of wind farms contributing to earnings in 2016 and capex to moderate, we believe the company's FCF stands to increase in 2016, allowing the company to further de-lever its balance sheet and raise the dividend payout ratio. The company's payout ratio was just 20% in 2015.