Citi Reduces NP Forecast for CHINA RES POWER (00836.HK) by 4-10% for 2025-27; Lowers Target Price to $21.5
Citi's Profit Forecast Adjustment: Citi has lowered its net profit forecast for CHINA RES POWER for the years 2025-27 by 4-10% due to disappointing interim earnings.
Impact of Tariff Reductions: The company's earnings were negatively affected by greater-than-expected reductions in renewable energy tariffs and one-off items.
Target Price Change: Citi reduced the target price for CHINA RES POWER from HKD22.5 to HKD21.5 but maintained a Buy rating, citing stable coal power earnings amid falling coal prices.
Interim Earnings Report: CHINA RES POWER reported a 16% decline in interim net profit to $7.872 billion and cut its interim dividend per share to 35.6 cents.
Trade with 70% Backtested Accuracy
Analyst Views on 00836
About the author
JPM Adjusts CHINA RES POWER Rating to Neutral and Reduces Target Price to HKD17
JPMorgan's Downgrade: JPMorgan has downgraded CHINA RES POWER from Overweight to Neutral and reduced its target price, while maintaining an Underweight rating for HUANENG POWER with a lower target price.
Impact of Price Floor Removal: The removal of the electricity price floor is expected to lead to further declines in on-grid electricity prices for thermal power, potentially compressing profit margins for these companies.
Uncertainty in Tariff Mechanism: Despite the Chinese government's mention of improving the capacity tariff mechanism, there is significant uncertainty regarding its effectiveness and implementation timing.
Negative Earnings Outlook: The earnings outlook for thermal power plants is unfavorable, with market forecasts and dividend predictions facing downside risks.
HSBC Research: Chinese Power Utilities Entering 'Stagnation Phase'
Challenges in China's Power Industry: HSBC Research indicates that China's power industry will experience weakened growth momentum in the first year of the 15th Five-Year Plan due to declining electricity prices, a slowdown in new installations, and a stabilizing policy environment.
Downgrades and Ratings: HSBC has downgraded HUANENG POWER from Hold to Underweight and CHINA RES POWER from Buy to Hold, reflecting concerns over their earnings forecasts.
Optimism for CHINA LONGYUAN: The report expresses optimism for CHINA LONGYUAN, anticipating that its earnings growth will lead the industry, driven by strong performance in wind resources.
Attractive Dividend Yields: CHINA POWER is projected to have a 5.8% dividend yield in FY26, while CHINA YANGTZE POWER is expected to yield about 3.7%, making them attractive options among their peers.
M Stanley Reduces Earnings Projections for CHINA RES POWER (00836.HK) and Sets Target Price at $23.8
EPS Forecast Adjustment: Morgan Stanley has lowered its 2026/2027 EPS forecasts for China Res Power from $3.49/$3.58 to $2.98/$3.08 due to anticipated lower tariffs.
Target Price Update: The brokerage increased its target price for the company from $23.7 to $23.8, based on a price-to-earnings ratio of 8x, reflecting a valuation extension to 2026.
Investment Rating: Morgan Stanley maintained an Overweight rating for China Res Power, citing its superior utilization hours for coal and wind power projects compared to peers.
Dividend Yield Stability: Despite potential tariff pressures in 2025, the company's secure dividend yield makes it an attractive option for investors.
Citi Lowers Target Price for CHINA RES POWER (00836.HK) to $19, Expresses Increased Optimism for Chinese Power Equipment Suppliers Next Year
Citi Research Downgrade: Citi Research downgraded CHINA RES POWER from Buy to Neutral, reducing its 2026/2027 net profit forecasts by 8.3% and 7.9% respectively due to a new contract with Guangdong Province.
Price Forecast Adjustments: The broker lowered its coal-fired power price forecast by 3.5% YoY for 2026 and increased the unit fuel cost for coal-fired plants, indicating a shift in market expectations.
Target Price Reduction: Citi Research decreased its target price for CHINA RES POWER by 11.6%, from $21.5 to $19, based on discounted cash flow (DCF) valuation.
Market Outlook: The report suggests a more favorable outlook for Chinese power equipment suppliers compared to power generation operators, who may face declining profit margins due to lower electricity prices.
Citi's Ratings and Target Prices for Power Utilities (Table)
Stock Performance Overview: Various Chinese energy stocks show mixed performance, with CHINA RES POWER and CGN POWER experiencing declines, while HUADIAN POWER and CHINA SUNTIEN report gains.
Short Selling Activity: Significant short selling activity is noted across several stocks, with CGN POWER having the highest short selling ratio at 34.136%, indicating bearish sentiment among investors.
Citi Recommends Buy for CHINA RES POWER, HUANENG POWER, and HUADIAN POWER Due to Appealing Yields
Coal Price Decline: Sxcoal spot coal price at Qinhuangdao fell to RMB686 per ton on September 10, marking a 0.9% weekly and 1.1% monthly decline, with a significant 19.8% drop year-over-year and 8.8% year-to-date.
Market Influences: The decline in coal prices is attributed to increased supply following military parades and major flooding, coupled with weak demand.
Power Stocks Ratings: BofAS rated several Chinese power stocks, including HUANENG POWER and EB ENVIRONMENT as Buy, while HUADIAN POWER was downgraded to Neutral, based on attractive expected yields for 2025.
Short Selling Data: The report includes short selling data for various power stocks, indicating varying levels of market activity and investor sentiment.
JPM Adjusts CHINA RES POWER Rating to Neutral and Reduces Target Price to HKD17
JPMorgan's Downgrade: JPMorgan has downgraded CHINA RES POWER from Overweight to Neutral and reduced its target price, while maintaining an Underweight rating for HUANENG POWER with a lower target price.
Impact of Price Floor Removal: The removal of the electricity price floor is expected to lead to further declines in on-grid electricity prices for thermal power, potentially compressing profit margins for these companies.
Uncertainty in Tariff Mechanism: Despite the Chinese government's mention of improving the capacity tariff mechanism, there is significant uncertainty regarding its effectiveness and implementation timing.
Negative Earnings Outlook: The earnings outlook for thermal power plants is unfavorable, with market forecasts and dividend predictions facing downside risks.
HSBC Research: Chinese Power Utilities Entering 'Stagnation Phase'
Challenges in China's Power Industry: HSBC Research indicates that China's power industry will experience weakened growth momentum in the first year of the 15th Five-Year Plan due to declining electricity prices, a slowdown in new installations, and a stabilizing policy environment.
Downgrades and Ratings: HSBC has downgraded HUANENG POWER from Hold to Underweight and CHINA RES POWER from Buy to Hold, reflecting concerns over their earnings forecasts.
Optimism for CHINA LONGYUAN: The report expresses optimism for CHINA LONGYUAN, anticipating that its earnings growth will lead the industry, driven by strong performance in wind resources.
Attractive Dividend Yields: CHINA POWER is projected to have a 5.8% dividend yield in FY26, while CHINA YANGTZE POWER is expected to yield about 3.7%, making them attractive options among their peers.
M Stanley Reduces Earnings Projections for CHINA RES POWER (00836.HK) and Sets Target Price at $23.8
EPS Forecast Adjustment: Morgan Stanley has lowered its 2026/2027 EPS forecasts for China Res Power from $3.49/$3.58 to $2.98/$3.08 due to anticipated lower tariffs.
Target Price Update: The brokerage increased its target price for the company from $23.7 to $23.8, based on a price-to-earnings ratio of 8x, reflecting a valuation extension to 2026.
Investment Rating: Morgan Stanley maintained an Overweight rating for China Res Power, citing its superior utilization hours for coal and wind power projects compared to peers.
Dividend Yield Stability: Despite potential tariff pressures in 2025, the company's secure dividend yield makes it an attractive option for investors.
Citi Lowers Target Price for CHINA RES POWER (00836.HK) to $19, Expresses Increased Optimism for Chinese Power Equipment Suppliers Next Year
Citi Research Downgrade: Citi Research downgraded CHINA RES POWER from Buy to Neutral, reducing its 2026/2027 net profit forecasts by 8.3% and 7.9% respectively due to a new contract with Guangdong Province.
Price Forecast Adjustments: The broker lowered its coal-fired power price forecast by 3.5% YoY for 2026 and increased the unit fuel cost for coal-fired plants, indicating a shift in market expectations.
Target Price Reduction: Citi Research decreased its target price for CHINA RES POWER by 11.6%, from $21.5 to $19, based on discounted cash flow (DCF) valuation.
Market Outlook: The report suggests a more favorable outlook for Chinese power equipment suppliers compared to power generation operators, who may face declining profit margins due to lower electricity prices.
Citi's Ratings and Target Prices for Power Utilities (Table)
Stock Performance Overview: Various Chinese energy stocks show mixed performance, with CHINA RES POWER and CGN POWER experiencing declines, while HUADIAN POWER and CHINA SUNTIEN report gains.
Short Selling Activity: Significant short selling activity is noted across several stocks, with CGN POWER having the highest short selling ratio at 34.136%, indicating bearish sentiment among investors.
Citi Recommends Buy for CHINA RES POWER, HUANENG POWER, and HUADIAN POWER Due to Appealing Yields
Coal Price Decline: Sxcoal spot coal price at Qinhuangdao fell to RMB686 per ton on September 10, marking a 0.9% weekly and 1.1% monthly decline, with a significant 19.8% drop year-over-year and 8.8% year-to-date.
Market Influences: The decline in coal prices is attributed to increased supply following military parades and major flooding, coupled with weak demand.
Power Stocks Ratings: BofAS rated several Chinese power stocks, including HUANENG POWER and EB ENVIRONMENT as Buy, while HUADIAN POWER was downgraded to Neutral, based on attractive expected yields for 2025.
Short Selling Data: The report includes short selling data for various power stocks, indicating varying levels of market activity and investor sentiment.
