HK Stock Market Move | CGN POWER (01816) dropped over 4% during trading hours. Institutions indicated that its profit risk is still present, leading to a downgrade in target price and earnings forecasts.

CGN POWER (01816) fell more than 4% during the trading session, and at the time of writing, it was down by 3.77% to 2.55 Hong Kong dollars, with a trading volume of 2.36 billion Hong Kong dollars. On the news front, Guangdong Province recently announced the results of next year's long-term electricity prices, with an average electricity price of 391.9 RMB per megawatt-hour, a year-on-year decrease of 15.9%, and a 13.5% discount compared to the local benchmark electricity price. Morgan Stanley pointed out that following Jiangsu Province's announcement of an overall decrease in electricity prices for next year, Guangdong Province also released the results of electricity market transactions for 2025, with an average electricity price per megawatt-hour decreasing by 7.4%. 16% year-on-year, slightly lower than market expectations, which is expected to make the profitability of coal-fired power enterprises more fragile. A research report from HSBC stated that CGN POWER's electricity production last year met expectations with higher utilization rates and new capacity driving growth. However, the repricing of electricity contracts fell short of expectations, with long-term power purchase agreements in Guangdong experiencing double-digit declines. The bank mentioned that the company's profit risks remain, and lowered the target price from 3.1 Hong Kong dollars to 3 Hong Kong dollars, maintaining a "hold" rating. The bank has also lowered its profit forecasts for the company for 2025 to 2026 by 1%, indicating an expected year-on-year decline of 2% to 1% in profits before considering the injection of assets, with downward risks still present regarding fees.