China Utilities & Renewables: Stimulus tailwinds beyond the usual suspects

The State Council executive meeting chaired by Premier Li Qiang earlier this week has stirred investor discussion on policy stimulus. Within the 15-FYP plan, there are clear development targets for nuclear, off-shore wind and ESS, where we see potential for stimulus to help achieve these goals. We like CGN Power, Orient Cables, and Sungrow as exposure. Anti-involution for solar is a continual policy development where we would not rule out further push; we like value plays GCL Tech and Daqo. Gas utilities may benefit from a border stimulus as well, and we like ENN Energy. Other utilities listed in HK are broadly less sensitive to China stimulus; in recent years the trading pattern has shown a negative correlation with China rates, which may be due to defensive exposure or participation in Southbound. In this sub-space, we like CKI.