Citibank: Reiterates CGN Power's (01816) “Buy” Rating Target Price of HK$3.8

The Zhitong Finance App learned that Citibank released a research report stating that it reaffirmed the “buy” rating of CGN Power (01816) and the target price of HK$3.8. The bank attended CGN's investor conference and visited its nuclear power plant project in Huizhou, Guangdong, China.

The bank said that the survey attracted more than 40 investors and analysts, confirming its expectations for the company's profit growth, including additional nuclear power production capacity, rapid nuclear power plant construction cycle, and competitive construction costs brought about by the use of domestically produced equipment. The bank expects the plant's net profit to reach 1.3 billion to 1.5 billion yuan in 2026, and the nuclear power plant construction cycle will only take 60 months.

Meanwhile, the bank expects the increase in electricity prices in Guangdong Province in January 2027 to be a positive catalyst. Its profit sensitivity analysis shows that for every 10 yuan/megawatt-hour increase in electricity prices in Guangdong Province, the company's net profit in 2027 is expected to increase by 255 million yuan, or 2.2% higher than Citi's forecast. CGN Electric Power is the bank's preferred Chinese power company, and the bank expects revenue and profit margin increases in 2027 to drive its profit growth.