Daiwa released a research report stating that while maintaining China Electric Power's (02380) “buy” rating, the target price was raised from HK$3.6 to HK$3.7.
The company's hydropower business will bring an attractive transformation to the company. The water volume in Hunan and Fujian was strong in the first two months of this year, and the company's management is confident that related businesses will turn losses into profits. In addition, the company's grid-connected hydropower generation in the first two months of 2024 will increase 84% year-on-year. The bank raised the company's net profit from 520 million yuan to 789 million yuan this year.
In terms of coal-fired business, the bank believes that coal-fired power generation still strongly supports the company's profit performance. It is expected that the company's fuel cost per unit this year will be reduced by 3% to 5% compared to the same period last year. The company also expects to levy a total electricity bill of 1.44 billion yuan this year, and already levied 240 million yuan in the first two months of this year.