Bank of Communications International: Lowered the target price of China Resources Power to HK$23.1 and maintained a "buy" rating

Golden Ten Data reported on March 17 that Bank of Communications International issued a report pointing out that China Resources Power (00836. HK) will announce its 2024 annual results on March 20, and the company’s core earnings are estimated to increase by 15.7% year-on-year to HK$12.7 billion in 2024 after adjusting for financial modeling. Considering that the power rationing rate and market-based transaction volume of wind and solar projects will increase year-on-year in 2025, and the ignition price spread of thermal power is expected to decrease year-on-year, the utilization rate and average electricity price of the company’s wind and solar projects have been reduced by 1 to 2 percentage points. As a result, earnings forecasts for 2025 and 2026 have been lowered by 22% and 21%. The bank’s target price based on the segment valuation method was lowered to HK$23.1, and the company’s 6.8x 2025 forecast P/E ratio is now below the 5-year historical average, which the bank believes has partially reflected the uncertainty of the company’s electricity price and utilization hours in 2025, and maintains a “buy” rating.