Citigroup Maintains "Sell" Rating on CGN POWER, Raises Target Price to HK$3.2

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Yesterday

According to a research report, Citigroup stated that the new nuclear power pricing mechanism in Liaoning Province is positive news for CGN POWER (01816), as it helps reduce electricity price uncertainty in the region. Approximately 70% of its output can be sold at a fixed price, and a similar mechanism may be implemented this year in Fujian Province. The bank believes this will help mitigate downside risks related to electricity prices for CGN POWER. As a result, Citigroup has raised its net profit forecasts for the current and next fiscal years by 5% and 1%, respectively, reflecting reduced expectations for price cuts. However, the report notes that CGN POWER's projected dividend yield for this year is only 2.9%, which is not considered attractive. Therefore, Citigroup maintains its "Sell" rating on the stock, while increasing the target price from HK$2.6 to HK$3.2.

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