[ET Net News Agency, 13 February 2019] UBS Global Research lowered its target price for
China Shenhua Energy (01088) to HK$19.3 from HK$20.3 and downgraded its rating to "sell"
from "neutral".
The research house said investors see Shenhua as a quality SOE able to efficiently
vertically integrate operations involving coal production, coal transportation, and power
generation.
Recent management changes increase uncertainty about Shenhua's dividend policy and
execution risk after its recent merger with GD Power (at group level), UBS noted.
It expects a range-bound coal market, and execution risks mean downside risk to earnings
and returns, which could disappoint investors seeking stability. (KL)