Morgan Stanley: Guangdong Province's electricity price results in 2025 are slightly lower than market expectations. Grant CGN POWER (01816) a "hold" rating.

Morgan Stanley released a research report stating that after Jiangsu Province announced a comprehensive reduction in electricity prices next year, Guangdong Province also announced the results of the 2025 electricity market transactions, with the average electricity price decreasing by 7.4 cents per megawatt-hour, a 16% decrease compared to the previous year, slightly lower than market expectations. It is expected that this may make the profitability of coal-fired power companies more fragile. The bank also mentioned that the price reduction for nuclear power in Guangdong Province in 2025 is limited, with the market electricity price only decreasing by 4 cents, considering that the market basic trading volume only accounts for about 30% of nuclear power trading volume. It is believed that this price reduction will have a negative impact of only about 4% to 5% on the profitability of CGN POWER (01816). It is expected that the company will offset this impact next year by reducing auxiliary service expenses and financing costs. Morgan Stanley rates CGN POWER as "Hold" with a target price of 3.69 Hong Kong dollars.