[ET Net News Agency, 20 June 2018] HSBC Global Research slashed its target price for
China Resources Power (CRP)(00836) to HK$17.6 from HK$18, and maintained its "buy" rating
as it is a higher quality operator with diversification in renewable energy and coal
mining.
The research house said coal prices may continue to rise as summer approaches, despite
government measures to cool the sector. It expects that earnings recovery for IPPs may be
hurt by higher coal prices and flat tariff policy, despite strength in utilisation.
It believes CRP's thermal assets are well positioned compared to its peers. It expects
CRP's ROE to return to 9.4% in 2019.
HSBC revised its 2018/19/20 earnings estimates by -3%/-3%/-3%, respectively, on unit
fuel cost change. (KL)