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With Asia’s renewable energy capacity witnessing a significant surge and playing a pivotal role in shaping the world’s clean energy landscape, the region offers a fertile ground for innovative technologies, government incentives, and ambitious projects.
The region dominated the global surge in renewable energy generation capacity in 2022, contributing to almost 60% of the overall increase, culminating in 1.63 Terawatt (TW) of renewable capacity. A substantial portion of this impressive growth was driven by China, which boasts the largest generating capacities for wind, solar and hydro energy in the world.
Additionally, as per Expert Market Research, the Asia-Pacific boasts the fastest-growing and largest renewable energy market worldwide and makes up for 30% of the global market share.
Looking forward, the overall power capacity in Asia is predicted to undergo consistent growth in renewable capacity, reaching 63% by 2035, a significant increase compared to the 40% recorded in 2022. Furthermore, the Asia-Pacific renewable energy market is expected to grow at a CAGR surpassing 9% between 2023 to 2028, according to Mordor Intelligence.
“As investors, it makes sense to focus on where the scope for fundamental change is greatest. Asian countries have an imperative to transition from dirty to clean energy, but they also have the will and the resources—human, technological, and natural—with which to do so. As a result, we believe that Asian companies are well-positioned to participate and drive the change whilst making higher sustainable returns for their shareholders,” said Nikko AM.
How to invest in Asia’s renewable energy market?
Amidst the notable expansion of Asia’s renewable energy sector, presented below is a compilation of five stocks that investors may want to consider.
LONGi Green Energy Technology
LONGi Green Energy Technology, a Chinese corporation, specialises in the development of mono-crystalline silicon, mono-crystalline modules, solar cells, photovoltaic systems, and photovoltaic power stations.
The company’s revenues rose by 60.03% year-on-year to 128.998 bn yuan ($18.03 bn) in 2022. During the same period, LONGi’s net profit grew by 63.02% year-on-year to 14.812 bn yuan ($2.07 bn). The company expects its revenues to surpass $160 bn yuan ($22.36 bn) in 2023.
Listed on the Shanghai Stock Exchange (SHA: 601012), the company has a market capitalisation of $31.17 bn. The company’s stock has fallen by 53.23% in the past year. It has a negative PE ratio of 14.25, a forward PE ratio of 12.12, and a price-to-book ratio of 3.30.
Renewable Japan
Renewable Japan engages in diverse operations, encompassing the establishment, operation, and supervision of power stations that harness renewable energy sources like solar power, wind power, and hydropower, facilitating electricity generation through these installations.
The company registered a 45.45% year-on-year fall in operating profit, amounting to 1.2 bn yen ($15.82 mn) in 2022. During the same period, the company’s net sales spiked by 11.32% to 17.7 bn yen ($127.30 mn).
Renewable Japan has a market cap of $211.24 mn and is traded on the Tokyo Stock Exchange (TYO: 9522). The company’s shares have risen by 33.86% since last year. It has a negative PE ratio of 50.36 and a price-to-book ratio of 2.98.
Adani Green Energy
Adani Green Energy, an Adani Group subsidiary, functions as a prominent renewable energy corporation. This Indian company specialises in constructing, operating, and maintaining hybrid power projects, utility-scale grid-connected solar power plants, wind plants, and solar parks.
The company’s revenue amounted to Rs 5,825 crore ($707.83 mn) in the fiscal year ended March 2023, up 54% year-on-year. During this time frame, Adani Green Energy saw its cash profit rise by 72% year-on-year to Rs 3,192 crore ($387.88 mn).
The company’s stocks are listed on the Bombay Stock Exchange (BOM: 541450) and the National Stock Exchange of India (NSE: ADANIGREEN). The company has a market cap of $21.26 bn. Since last year, the company’s shares have fallen by 46.65%. Also, the company’s shares have a negative PE ratio of 203.87 and a price-to-book ratio of 24.27.
“Adani Green Energy’s FY 2022-23 earnings were strong as expected, supported by robust revenue and EBITDA growth…Net debt was largely stable, thanks to improved operating cash flows and reduced capex,” said the credit and ESG research specialist Lucor Analytics on Smartkarma.
Keppel Corporation
Keppel is a Singapore-based conglomerate with various business segments, including offshore and marine, property, and infrastructure. The company has interests in renewable energy and has been involved in offshore wind and other sustainable projects.
The company registered a 0.14% year-on-year rise in revenue, amounting to $6.62 bn in 2022. During the same period, its net profits spiked by 9% year on year to $927 mn.
Keppel Corporation has a market cap of $9.49 bn and is traded on the Singapore Exchange (SGX: BN4). The company’s shares have risen by 62.68% since last year. It has a PE ratio of 14.67, a forward PE ratio of 3.12, and a price-to-book ratio of 1.10.
Besides Singapore, American Depository Receipts (ADR) are listed on NASDAQ (OTCMKTS: KPELF) in the US and are accessible through over-the-counter transactions.
Solarvest Holdings
Solarvest Holdings serves customers in Malaysia by offering engineering, procurement, construction, management, operation, and maintenance services for solar projects through its subsidiaries.
The company’s net profit was up by 185.5% year-on-year to RM 19.7 mn ($4.32 mn) in 2022. During the same period, the company’s revenue increased by 107.9% year-on-year to RM 365.5 mn ($80.25 mn).
Solarvest Holdings stocks are listed on the Kuala Lumpur Stock Exchange (KLSE: SLVEST). The company has a market cap of $190.58 mn. Since last year, the company’s shares have gained 72.97%. Along with that, the shares have a forward PE ratio of 31.75 and a price-to-book ratio of 4.64.
Editor’s note: All stock movement figures as of July 28, 2023.
