China Everbright International Ltd. (00257.HK) said the country’s tightening of requirements for environmental protection projects will lead to industry consolidation, and open up more opportunities for the company to acquire rivals, the Hong Kong Economic Journal reported on Monday.
The company has invested close to 10 billion yuan (US$1.5 billion) in more than 30 projects this year, a record high for the firm in both volume and value, chief executive Chen Xiaoping (陳小平) said.
Chen expects the number of projects under construction in the country will soar to new heights next year amid the government’s focus on environmental protection.
However, the company will maintain its waste-to-energy projects at a tariff of 50 to 60 yuan per ton and will not participate in any low-cost bidding, he said.
It targets to keep its internal rate of return for all power projects at a level above 10 percent.
Citigroup, however, is not as upbeat about the company’s prospects. Its slashed the target price by 30 percent to HK$9 per share, assuming a compound annual growth rate of 15 percent for the company’s earnings per share in 2015-2017 and an estimated price to earnings ratio of 18.8 times for next year.
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