Bank of America Securities released a research report stating that Chinese power stocks' first-half performance broadly aligned with the firm's expectations. Thermal power generation, wind power supply chain, and environmental businesses demonstrated strong profitability and free cash flow performance. However, gas, wind, and solar independent power producers, along with solar supply chains, showed relatively lackluster results.

The firm maintains a neutral stance on thermal power generation as the market harbors concerns about potential electricity tariff reduction pressures emerging between September and December. HUANENG POWER (00902) receives a "Buy" rating based on its 8% free cash flow yield, with the H-share target price raised from HK$6.0 to HK$6.2.

The firm noted that declining coal-fired and renewable energy revenues impacted CHINA RES POWER (00836), maintaining a "Neutral" rating with the target price lowered from HK$20.2 to HK$19.8.

HUADIAN POWER (01071) was downgraded from "Buy" to "Neutral," with the H-share target price reduced from HK$4.9 to HK$4.6, due to concerns over electricity price declines and the industry entering seasonal weakness, potentially intensified by weakening supply-demand dynamics and declining wind/solar tariffs. However, stabilizing coal prices and reduced internal competition may provide some support.

Bank of America Securities also assigns a "Buy" rating to EB ENVIRONMENT (00257), which reported a 23% year-on-year increase in first-half pre-tax profits, exceeding expectations, with doubled free cash flow and clear capital expenditure guidance. The target price is set at HK$5.3.

Additionally, the firm assigns an "Underperform" rating to CHINA LONGYUAN (00916) with a target price of HK$6.0, noting that its first-half profit decline met expectations. The firm will continue monitoring subsidy collection conditions and upcoming provincial power tenders.