Buy CR Power (836 HK) As CRNE (More Than) Doubles On Debut
Priced at RM10.11/share, China Resources New Energy (001248 CH) (CRNE) appeared fairly priced on a trailing P/B; to possibly “cheap” on a trailing PER metric, depending on your forecast viewpoint.
However, at ~700x oversubscribed, and given CRNE is part of the vast SOE China Resources Holdings, a pop on debut was a safe bet. CRNE is now up 109%.
China Resources Power (836 HK)‘s 81.8% stake in CRNE accounts for 307% of its market cap. And places the discount to NAV at ~74%, That’s not sustainable.
Note - I absolutely butchered my NAV calcs in prior insights on CRP.
The calcs in this insight are correct.
Apologies!
The Trade:
China Resources Power (836 HK) has barely registered CRNE’s bigly price gain on debut. The question is whether it will.
Right now, CRP is totally mispriced versus its holding in CRNE.
And CRP’s metrics are not demanding versus peers.
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