<div id="readability-page-1"><div><p>CGN Power (SEHK:1816) has said its A Share Convertible Corporate Bonds will become eligible for conversion into A shares on January 15, 2026, a move that could reshape capital structure and liquidity.</p> <p>See our latest analysis for CGN Power.</p> <p>At the current share price of HK$3.12, CGN Power’s recent 7-day and 30-day share price returns of 4.0% and 6.48% suggest interest is picking up again. Its 1-year and 5-year total shareholder returns of 28.91% and 112.95% show a longer track record that investors may weigh alongside moves like the upcoming bond conversion.</p> <p>If CGN Power’s funding plans have you thinking about other opportunities in essential services, it could be a good moment to check out healthcare stocks as another area to research.</p> <p>With CGN Power trading around HK$3.12 and an indicated intrinsic value gap, plus only a small discount to the latest analyst target, you have to ask yourself: is there still mispricing here, or is the market already baking in future growth?</p> <h2>Price-to-Earnings of 15x: Is it justified?</h2> <p>At a last close of HK$3.12, CGN Power is on a P/E of 15x, which screens as good value against the wider Asian renewable energy industry but expensive compared to its closer peer group.</p> <p>The P/E multiple compares the share price with earnings per share, so it reflects how much investors are currently willing to pay for each unit of profit. For a regulated, capital intensive utility business, earnings based measures like P/E often carry weight because cash generation and profitability sit at the center of many investment cases.</p> <p>Here, the picture is mixed. On one hand, the stock trades on a lower P/E than the Asian renewable energy industry average of 16.2x. This suggests the market is not paying a premium for its earnings. On the other hand, the same 15x P/E is almost double the peer average of 7.7x and above an estimated fair P/E of 12x. This points to investors assigning a richer multiple than both peers and the level our fair ratio suggests the market could gravitate toward.</p> <p>Compared with the sector, that gap is hard to ignore. Being cheaper than the broad industry at 16.2x, yet materially higher than peers at 7.7x and above the 12x fair P/E, implies the market is pricing CGN Power differently to both its closest comparables and the fair ratio anchor.</p> <p>Explore the SWS fair ratio for CGN Power</p> <p><strong>Result: Price-to-Earnings of 15x (OVERVALUED)</strong></p> <p>However, you still need to factor in risks such as potential equity dilution from bond conversions and any shift in regulated returns that could soften the earnings picture.</p> <p>Find out about the key risks to this CGN Power narrative.</p> <h2>Another View: DCF Points the Other Way</h2> <p>While the 15x P/E ratio screens as expensive against peers, our DCF model tells a different story. With CGN Power at HK$3.12 versus an estimated fair value of HK$4.83, the shares screen as trading at a 35.3% discount. So is this a value gap or a value trap?</p> <p>Look into how the SWS DCF model arrives at its fair value.</p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/1ee0ea8d-622f-4f7e-b8b3-dad4d0114071/chart/dcf?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/1ee0ea8d-622f-4f7e-b8b3-dad4d0114071/chart/dcf"/><figcaption>1816 Discounted Cash Flow as at Jan 2026</figcaption></figure><p>Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out CGN Power for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 880 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.</p> <h2> Build Your Own CGN Power Narrative</h2> <p>If you see the numbers differently or prefer to rely on your own work, you can stress test every assumption and Do it your way in under three minutes.</p> <p>A great starting point for your CGN Power research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.</p> <h2>Looking for more investment ideas?</h2> <p>If CGN Power is on your radar, do not stop there. Expanding your watchlist with high quality ideas can give you more options when markets move.</p> <ul> <li>Spot potential value candidates early by scanning these 880 undervalued stocks based on cash flows that currently trade at prices the market may not fully appreciate.</li> <li>Tap into long term income themes by reviewing these 12 dividend stocks with yields &gt; 3% that aim to combine yield with underlying business strength.</li> <li>Back bold growth themes by researching these 79 cryptocurrency and blockchain stocks that are building around blockchain, digital assets and related infrastructure.</li> </ul> <p><em> This article by Simply Wall St is general in nature. <strong>We provide commentary based on historical data     and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice.</strong> It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your     financial situation. We aim to bring you long-term focused analysis driven by fundamental data.     Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.     Simply Wall St has no position in any stocks mentioned.</em></p></div></div>

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<p>CGN Power (SEHK:1816) will allow its A Share Convertible Corporate Bonds to convert into A shares starting January 15, 2026, potentially impacting its capital structure. Currently priced at HK$3.12, the stock shows a P/E ratio of 15x, which is higher than its peers but lower than the Asian renewable energy average. A DCF analysis suggests a fair value of HK$4.83, indicating a 35.3% discount. Investors should consider risks like equity dilution and regulatory changes while evaluating CGN Power's investment potential.</p>

CGN Power (SEHK:1816) Valuation Check As Bond Conversion To A Shares Nears In 2026