Citigroup: China Longyuan Power Group Corporation (00916) is rated as "buy" with a target price lowered to 6.8 Hong Kong dollars.

Citi released a research report that gave China Longyuan Power Group Corporation (00916) a "buy" rating. After conducting a recent due diligence on the company, Citi lowered its net profit forecast for 2024-2026 by 4-8% due to higher capital expenditures during that period compared to their previous assumptions. The target price was also decreased by 15%, from 8 Hong Kong dollars to 6.8 Hong Kong dollars. The total electricity generation in August increased by 7.4% year-on-year, showing a mediocre performance. Citi pointed out that the rating for Longyuan mainly reflects valuation. Considering the downward adjustment in electricity prices and negative free cash flow, investors in the utility and renewable energy markets in Hong Kong have generally held a cautious attitude towards China Longyuan Power Group Corporation this week. The bank expects positive catalysts to only appear next year, assuming that electricity fee income increases by then and the subsidy verification process has been completed, allowing the power grid company to issue bonds for subsidy payments.