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<Research> Citi Expects Power Stocks to Underperform on Rising Coal Costs Squeezing Margins
Recommend 3 Positive 6 Negative 6 |
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Citi released a research report stating that although coal prices have risen, share prices of Chinas coal-fired independent power producers (IPPs) have still climbed 20% over the past three months. The bank believes this was mainly driven by tariff hikes in certain regions due to rising costs, spillover effects from gains in US power utilities amid electricity shortages, fund inflows related to AI investments, the sectors prior underperformance in the equity market, and expectations of high dividend yields in 2025. The bank expects investors to focus more on the fundamentals of companies in the sector, forecasting that margins will narrow due to higher coal costs. Coupled with the ex-dividend period for July payouts, performance is likely to weaken. The bank assigned Sell ratings to HUANENG POWER (00902.HK), CHINA RES POWER (00836.HK) and HUADIAN POWER (01071.HK). (sl/u) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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