The Chinese government has been increasing regulatory pressure on key strategic sectors of its economy, including the private refiners sector and tech giants like Alibaba and Tencent. This crackdown has resulted in significant losses for the tech sector but has been beneficial for China's clean energy sector.
Investors have been rallying around Chinese clean energy companies, betting that Beijing will continue to support the sector while sidelining Big Tech. President Xi Jinping's recent announcement that China will stop building coal-fired power plants overseas as part of efforts to reduce carbon emissions has further boosted the clean energy sector.
As a result, China's clean energy sector has become one of the few bright spots in the market. The CSI New Energy Index has seen a 38.6% increase year-to-date, while the KraneShares CSI China Internet ETF has experienced a -36.9% return.
Here are five Chinese energy stocks worth considering:
1. China Petroleum & Chemical Corp. (Sinopec)
Market Cap: $82.1B
YTD Returns: 11.9%
Sinopec is one of China's three state-owned oil companies and the largest oil and gas company in the Asia Pacific region. It operates in oil and gas exploration, refining, marketing, and the production and sales of petrochemicals. Despite a decrease in profit in 2020 due to the pandemic, Sinopec has rebounded this year with a net profit of 39.15 billion yuan ($6.05 billion) in the first half of 2021.
2. PetroChina Company Limited
Market Cap: $163.2B
YTD Returns: 58.7%
PetroChina is the world's second-largest oil and gas company and operates in various sectors including oil and gas operations, oilfield services, and new energy development. The company plans to spend 239 billion yuan ($37 billion) in annual capital spending to increase domestic production and improve China's energy security.
3. China Longyuan Power Group Corporation Limited
Market Cap: $17.3B
YTD Returns: 104.9%
China Longyuan Power Group is a subsidiary of state-owned China Energy and specializes in wind and coal power generation. The company has seen a surge in its stock price since President Xi Jinping's declaration.
4. Huaneng Power International, Inc.
Market Cap: $14.8B
YTD Returns: 49.8%
Huaneng Power International generates and sells electricity and thermal heating services in China and international markets. The company has a diverse portfolio of energy sources and a strong focus on low-carbon energy. Its shares have also been soaring after recent developments.
5. Huadian Power International Corporation
Market Cap: $7.0B
YTD Returns: 47.2%
Huadian Power International is engaged in the generation and sale of electricity and heat in China. The company operates various power plants, including coal-fired and renewable energy projects. Its shares have seen a significant increase since President Xi Jinping's announcement.
Overall, these Chinese energy stocks offer potential opportunities for investors interested in the clean energy sector.