Kim Eng Securities starts Renewable Energy Asia Group (5DW.SG) at Buy with $0.50 target price, based on 12x FY12 P/E, according to Dow Jones.

Kim Eng says company offers unique vertically-integrated business model spanning wind farm development, components manufacturing, plus engineering, procurement and construction.

Broker notes China’s recent approval of RMB 5 trillion ($992 billion) investment plan over 2011-2020 for new energy bodes well for REA’s prospects. Says Chinese legislation requires all power grid companies to buy electricity produced by renewable energy generators, hence benefiting players like REA.

“We like REA for its ability to generate long-term recurring income from its wind farm projects,” says Kim Eng. Shares flat at $0.340.