Damo: China Resources Electric Power (00836) and Huaneng International Power (00902) are subject to limited uncertainty in electricity prices this year

The Zhitong Finance App learned that Morgan Stanley released a research report saying that China Resources Electric (00836)'s coal and electricity prices are expected to be more affected than their peers this year, mainly because Jiangsu, Guangdong, and Guangxi have greater business exposure. It is expected that China Resources Electric's coal and electricity prices will drop 3.3 points year on year, while Huaneng International Power (00902) may drop 2.4 points. The bank lowered China Resources Power's target price from HK$22.6 to HK$22.5, and “increased” its rating. At the same time, it raised Huaneng International's target price from HK$4.25 to HK$5, which is “in line with the market”.

Damo pointed out that since October 2024, the stock ratings of China's independent power producers have declined, mainly due to concerns about the annual decline in electricity prices and sector rotation. The bank believes that the above decline has been reflected in current prices, and believes that the uncertain factors of electricity prices for China's independent coal power producers are limited this year.