Power stocks continued their recent gains in early trading. As of press release, Huadian International (01071) rose 4.47% to HK$4.67; Huaneng International (00902) rose 4.23% to HK$5.17; Datang Power (00991) rose 2.65% to HK$1.55; China Electric Power (02380) rose 2.55% to HK$3.22; and China Resources Electric (00836) rose 1.83% to HK$18.96.
The Zhitong Finance App learned that power stocks continued their recent gains in early trading. As of press release, Huadian International (01071) rose 4.47% to HK$4.67; Huaneng International (00902) rose 4.23% to HK$5.17; Datang Power (00991) rose 2.65% to HK$1.55; China Electric Power (02380) rose 2.55% to HK$3.22; China Resources Electric (00836) rose 1.83% to HK$18.96.
Galaxy Securities pointed out that due to the decline in coal prices in the market, the profits of thermal power companies improved dramatically in 2023. Coal prices are expected to continue to decline in 2024, and there is still room for improvement in the profits of thermal power companies. The bank pointed out that the overall performance of the power sector is highly deterministic and has strong dividend capacity, and will continue to benefit from the central government's state-owned enterprise reforms in the future. We continue to be optimistic about the long-term investment value of the electricity sector. In the short term, we recommend a thermal power sector with policy catalyst, continuous improvement in performance, and room for improvement in valuation.
Haitong International, on the other hand, believes that in theory, the trend of weakening coal prices is obvious and sustainable. Thermal Power is under-profitable and undervalued. The dividend rate is expected to be at least 6% in 2024, and Hong Kong stocks may exceed 10%. Overseas power leading PE is generally around 20 times higher, and domestic thermal power investment opportunities are obvious.