China Resources(Holdings)Co.,Ltd.

UBS raises CR Power to HK$18

Time:2017-04-13Source:ET Net News Agency

UBS Global Research raised its target price for China Resources Power (CRP) to HK$18 from HK$15.3, and maintained its "buy" rating.
With superior margins at the coal-fired power business and coal mines partly offsetting the impact of high coal prices, CRP has the most defensive returns among Chinese IPPs, said the research house.
UBS also likes the company's initiative to voluntarily slow down capex and pay out the cash to shareholders as dividends, as management has indicated a stable DPS for 2016-18 ifno major adverse circumstances occur.
The research house cut its 2017 EPS by 36% to factor in UBS's new 21% higher coal price forecast of Rmb580/t. However, it raised its EPS forecasts by 3%, 12% and 18% for 2018-20, respectively. This factors in: (1) better power demand growth of 4-5% p.a.; (2) a tariff increase of 2.5% in 2018; 3) a fall in coal prices to Rmb520/t in 2018 from Rmb580/t in 2017. (ET Net News Agency) 2017/04/11