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<Research>Daiwa Upgrades CHINA RES POWER to Hold, Hikes CGN POWER's TP
Recommend 4 Positive 11 Negative 7 |
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Daiwa released a report downgrading the Chinese power industry from Positive to Neutral in the belief that the Chinese power industry lacked actionable ideas. Among them, hydropower valuations were high, requiring better market entry timing, while the utilization rate of renewable energy and tariff downside remained issues. Daiwa explained that the power sector outperformed the overall market in 1-3Q24, benefiting from the defensive nature of these stocks amid ongoing "de-risking" sentiment. However, the broker noted that investors have clearly shifted towards risk preference since October as driven by China's economic stimulus measures. This change in outlook has led to a flow of funds from power stocks to other industries, and the broker believed this situation will persist into 2025. Looking ahead to next year, the broker ranked nuclear power/ coal power/ hydropower > renewable energy in pecking order. It lifted its target price for CGN POWER (01816.HK)'s H shares from $2.1 to $2.9, and upgraded CHINA RES POWER (00836.HK) from Underperform to Hold, as negative factors have eased and the yield has reached 4%. The broker's target prices for Chinese energy stocks are detailed in a separate table. AAStocks Financial News |
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