Citigroup has revised its outlook for China Resources Power (00836.HK), lowering the utility giant's thermal power generation forecast for this year from an anticipated 4% year-on-year increase to a 1% contraction. The investment bank simultaneously reduced its net profit projections for 2025-2027 by 6%, citing operational adjustments. Consequently, Citi adjusted the stock's target price downward by 2.2% to HK$22.5, though it reaffirmed a "Buy" rating, emphasizing the stock's compelling 6.3% dividend yield.
For the first half of 2023, analysts anticipate China Resources Power will post a net profit of approximately ¥9.511 billion, marking a modest 1.6% year-on-year increase. This growth is primarily attributed to lower unit fuel costs. Excluding one-off items, recurring net profit is expected to surge 15% annually.
Looking ahead, Citi highlighted the potential spin-off of China Resources Power's renewable energy segment through an A-share listing, likely occurring between the second half of 2023 and the first half of 2024. The bank also noted the company maintained a 40% dividend payout ratio last year and expects this policy to continue without reduction in the foreseeable future.
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