Daiwa: Maintaining China Resources Power's (00836) "outperform" rating the target price rose by 7.3% to HK$22

Zhitong Finance APP learned that Daiwa released a research report saying that maintaining The "outperform the market" rating of China Resources Power (00836), based on the downgrading of last year's fuel cost forecast, the target price was raised by 7.3% from HK$20.5 to HK$22, and its net profit in the profit police is expected to fall by 70% to 80% year-on-year, according to this calculation, it will achieve a profit of 1.5 billion to 2.3 billion yuan, which is better than the bank's original expectations, due to the initial estimate of some of its peers.

The bank believes that Rundian may only spin off renewable energy assets and list in Hong Kong in the form of real estate investment trusts (REITs), with a valuation lower than that of A-share listed companies. China Power (02380) also intends to spin off the renewable energy business and go public, but the valuation is more attractive, as the target is Chinese mainland and Hong Kong, China and Hong Kong.

The report mentioned that the spot price of 5500 kcal/kg thermal coal has risen by 40.2% year-to-date. Although the National Development and Reform Commission on Wednesday (9) pointed to stabilize coal prices and ensure coal supply, the target price of ports and production areas is capped at 900 yuan and 700 yuan per ton, but believes that coal independent power plants are still under pressure from high fuel costs.

In addition, the proportion of coal burning in China's electricity is small, 50% last year and 12% by 2025, while the proportion of run electricity is 64% and 42% respectively. Therefore, based on the renewable energy transition plan, China Power is the bank's first choice among coal independent power plants. It is also believed that among the pure renewable energy independent power plants, investors may prefer Longyuan Power (00916) and Datang New Energy (01798).