Latest Search
Quote
| Back Zoom + Zoom - | ||||
|
<Research>Citi Top Picks CR GAS, CKI, GOLDWIND, CR POWER & Others Among CN/HK Utilities & New Energy Stocks
Recommend 42 Positive 74 Negative 59 |
||||
|
||||
|
Citi Research commented in a report that nearly half of the 48 Mainland and Hong Kong companies in the public utilities, new energy and grid facilities sectors reported weaker-than-expected 1H24 results in August, which the broker did not find surprising given a weak Chinese economy. For 2H24, the broker suggested focusing on high-growth stocks with good dividend payout ratios, clear earnings outlooks that are not dependent on the macro economy, and stocks with price catalysts and higher export contributions. Within the sector, Citi's top picks include CHINA RES GAS (01193.HK), CKI HOLDINGS (01038.HK), GOLDWIND (02208.HK) and CHINA RES POWER (00836.HK), among others. Cit set a target price of $32.5 for CR GAS, $63 for CKI, $5.35 for GOLDWIND and $27 for CR POWER. All of them are rated Buy, based on their bright earnings outlook, strong cash flows and sustainable margins without excessive competition. With US 10-year treasury yields at 3.9%, the broker considered stocks with high earnings visibility and forecasted yield over 5% this year attractive. Such stocks included BJ ENT WATER (00371.HK), EB ENVIRONMENT (00257.HK), HKELECTRIC-SS (02638.HK) and POWER ASSETS (00006.HK), which are each with positive free cash flow. High-yield stocks with negative free cash flow include CHINA POWER (02380.HK), CHINA SUNTIEN (00956.HK) and TG SMART ENERGY (01083.HK). In addition, the potential start of the US interest rate cut cycle in September is expected to favour Hong Kong's public utility stocks, whose share prices have historically been highly correlated with US treasury yields. Among them, CKI and PAH have M&A upside, while CR POWER may acquire nuclear assets in Huizhou from its parent in 2H24. However, Citi added that some public utility stocks are facing negative catalysts. GUANGDONG INV (00270.HK)'s property impairment in 2H24 may rise HoH, reflecting the downturn in the housing market. BEIJING ENT (00392.HK) may find it difficult to get a big subsidy from the Beijing municipal government to turn the Nangang LNG terminal into profit in 2H24. CHINA LONGYUAN (00916.HK) may incur an asset impairment loss on the replacement of its small wind turbines in 4Q24. AAStocks Financial News |
||||
Copied to Clipboard
 |
||||
