HSBC Global Research lowered its target price for Huadian Power (01071) to HK$3.4 from HK$3.6 and maintained its "hold" rating.
The research house said Huadian Power should see a recovery in ROE in 2019-20 to 5-6%, off the low base last year but below its average in the past five years. Therefore, it believes the valuation is largely fair at the moment, in view of a 30% discount in current forward PB to its past-five-year mean, respectively.
HSBC raised its earnings forecasts for Huadian by 1-8% for 2019-21.
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