[ET Net News Agency, 17 September 2018] Credit Suisse raised its target price for China
Resources Power (CRP)(00836) to HK$20 from HK$18.5, and maintained its "outperform"
rating.
The research house revised up CRP's 2019-20 EPS forecasts by 11-19% (unit fuel cost down
7%/2% YoY in FY2019-20). With coal supply increases more than offsetting demand growth,
Credit Suisse expects the coal price to weaken further to Rmb580/t in 2019 (versus
Rmb610/t assumed earlier). Despite minor tariff pressure in FY2019, with likely widening
of direct supply tariff discounts, the earnings impact is net-net positive.
Credit Suisse expects CRP to actively invest in renewables (especially wind), which
could account for close to half of earnings by FY2020 and also support further ROE
recovery to 11%. (KL)