Thanks to supportive policies.
Forty utility, clean energy and equipment companies will report their FY16 results from 27 February, according to a Citi report.
"We expect 11 companies, of which the biggest market caps are Longyuan, BE Water, NARI, ENN and Huaneng Renewables, to report FY16E net profits above consensus, and another 17 companies, of which the largest market caps are HKCG, CGN, CRP, GDI and HKEI, to miss," Citi said.
Here's more from Citi:
Ahead of the results seasons, we reiterate our positive view on the PRC gas sector with 15-20% yoy net profit growth and positive free cash flow as well as the renewables sector with 20-30% yoy earnings growth; supportive policies for them could also be expected from the March NPC meeting in Beijing to encourage more NG usage and more new projects to be developed under the PPP model.
We expect Longyuan, Huaneng Renew. & Suntien FY16E results to beat consensus, benefiting from utilization rises in late 2016E and interest cost cuts. We prefer operators to equipment suppliers on less new capacity. China High Speed’s result should miss, assuming domestic sales volume drops yoy.
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