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<Research>Daiwa Downgrades CHINA RES POWER (00836.HK) to Underperform, Trims TP to $17.7
Recommend 9 Positive 15 Negative 10 |
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CHINA RES POWER (00836.HK)'s thermal power business is at risk of profit contraction due to a potential cold winter and a sluggish renewable power sector, Daiwa released a research report saying. China may face a cold winter brought on by the La Nina phenomenon this winter. The spot coal price rose 39% YoY in the last La Nina-induced cold winter in 2022, while CHINA RES POWER's thermal power business recorded a net loss of RMB532 million in the same period. Daiwa believed that the market is overlooking the risk, and that official authorities may confirm the arrival of La Nina in the coming weeks, which is expected to be a major catalyst and inflection point. Daiwa downgraded CHINA RES POWER from Hold to Underperform, and lowered its 2024-2026 EPS forecasts by 6-16% to reflect potential downward valuation re-rating. The broker also trimmed its target price from $20 to $17.7. AAStocks Financial News |
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