■ REE’s investment portfolio currently accounts for ~70% of its value, but its
investments in PPC and hydropower companies have depressed earnings in FY16F.
■ In 2016, REE acquired stakes in three new hydropower companies: VSH, SHP and
■ We raise our target price by 7% and FY17-18F EPS by 19-21% to reflect the
company’s new hydropower investments and improvement in PPC’s situation.