TCL Zhonghuan Renewable Energy Technology Co Ltd Class A

002129: XSHE (CHN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
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TCL Zhonghuan Earnings: The Worst Is Likely Over; Shares Fairly Valued

Cheng Wang

Nov 5, 2024

We maintain our fair value estimate of CNY 10.50 for TCL Zhonghuan and consider the shares fairly valued after a 55% rise from their September lows. Despite the weak third-quarter results, we anticipate an improvement in the fourth quarter and next year. We now project a bigger loss of CNY 7.9 billion in 2024 compared with our previous estimate of CNY 5.9 billion. However, our estimates beyond 2024 remain unchanged. We expect Zhonghuan to narrow its losses in 2025 versus 2024, and it will turn profitable in 2026, helped by industry consolidation and more disciplined competition.

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TCL Zhonghuan Renewable Energy Technology Co Ltd Class A

TCL Zhonghuan Earnings: The Worst Is Likely Over; Shares Fairly Valued

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