China's infrastructure upgrades to slam clean energy development hurdles

Wind power is also highly ranked.

It is expected that improving infrastructure, such as transmission grids and gas pipelines, will loosen the bottleneck seen in clean energy development.

Maybank Kim Eng believes the UHV transmission network could help improve the curtailment ratio and IRR of wind power projects in the long run.

Here's more from Maybank Kim Eng:

The more strategic plan for wind power capacity growth could improve the overall profitability of wind power companies.

Trading at around 0.5x PEG, a two-year low, provides excellent long-term buying opportunities, in our view.

We like gas distribution on the back of robust gas sales and new driver from sales to vehicle users.

We expect sales volumes will continue to grow by 20-25% due to new gas infrastructure. However, gas sales margin risk could increase as we expect it is more difficult to pass on the hike in upstream prices after two years when natural gas end-user prices are closer to the prices of other energy substitutes.

NEUTRAL view on Chinese IPPs as we believe the margin expansion is over. We believe spot coal prices have already fallen to a level close to the cash production cost so the downside for spot coal prices is small.

Also, we expect a coal-fired tariff cut in 3Q14. We believe catalysts from potential asset injections have been reflected in the share prices.

We also have a BUY rating on Power Assets as we forecast upside potential from its overseas expansion and BUY rating on GCL-Poly as we expect cost reduction could boost margins in FY14E.