RenewableEnergyAsia(REA): Our house maintains Buy lowering TP to $0.35 from prev $0.40. Revision due to waning appetite for wind-farm stocks attributed to poorer performance of China Datang share price on HKSE since 17 Dec 2010. REA has 2 recent JVs with Datang in China wind farms. Positive view on REA’s recent disposal of fastening business for $7.6m, which allow co to focus on core renewable energy segment…
Note that REA has yet to turn profitable and wind farm plays Sinovel and Longyuan on other exchanges, have been lackluster as well. Co to trade at fwd 2011P/E of 17.9x compared to peers in HK and China at approx fwd P/E 24-26x.
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