What happened

Zhongli’s actual controller announced plans to purchase no lessthan 10mn shares for no more than Rmb23/sh in the secondarymarket over the next six months because of his confidence inZhongli’s future development and his positive view on Chinacapital market’s long-term investment value. At present, theactual controller holds 266,737,337 shares or 46.94% of thecompany.

Comments

We believe the actual controller’s plan to raise his shareholdingsdemonstrates his confidence in corporate growth. On September1, Zhongli announced that it had signed an agreement withXinwei on the sale of 60MW ground-mounted PV solar farms. Weexpect the recognition of Zhongli’s solar farm disposal toaccelerate as the peak season arrives in 2H15.

Maintain BUY on Zhongli and TP at Rmb25 (21x 2016eP/E or 0.4x PEG).