HK Stock Market Move | China Longyuan Power Group Corporation (00916) rises nearly 7%, leading the way in power stocks. The industry benefits from interest rate cuts at home and abroad, with long-term investment value expected to be re-evaluated.

In the early session, power stocks continued to rise. As of the time of writing, China Longyuan Power Group Corporation (00916) rose by 5.82% to HK$6.18; CHINA RES POWER (00836) rose by 2.69% to HK$21; CHINA POWER (02380) rose by 2.52% to HK$3.66; and Huadian Power International Corporation (01071) rose by 2.36% to HK$4.34. On the news front, last week the Federal Reserve announced a 50 basis point rate cut. HAITONG INT'L pointed out that historical data shows that during rate-cut cycles, the power sector has demonstrated strong fundamental trends. In addition, the central bank has established a special refinancing facility to guide banks to provide loans to listed companies and major shareholders, supporting buybacks and increased holdings of listed company stocks. Founder believes that this move by the central bank will help companies focus on market value and enhance market investment value. Guoyuan International pointed out that against the backdrop of rate cuts at home and abroad, power operators as rate-sensitive sectors with heavy capital investment are expected to benefit from the lower rates, leading to improved project investment returns and lower comprehensive financial costs for companies, thereby supporting stable growth in the performance of power operators. Moreover, dividend payouts in the power industry have been increasing in recent years. Power assets have the nature of sustainable operation as utilities, especially hydropower and nuclear power with relatively stable electricity prices, have attributes similar to long-term bonds, and the medium to long-term investment value is expected to be further reassessed.