Citi's Ratings and Target Prices for Power Utilities (Table)

Citi Research downgraded CHINA RES POWER from Buy to Neutral primarily due to a reduction in its net profit forecasts for 2026 and 2027 by 8.3% and 7.9%, respectively. This adjustment followed the signing of a contract with Guangdong Province, which prompted the broker to lower its coal-fired power price forecast (a 3.5% year-over-year decrease for 2026, compared to a previous estimate of a 1.5% decline) and to increase the unit fuel cost for coal-fired plants (a 1% year-over-year drop for 2026, previously a 3% decrease). Additionally, Citi Research expressed a more optimistic outlook for Chinese power equipment suppliers over power generation operators, citing concerns about declining profit margins for the latter due to lower market electricity prices amid no power shortages in China. Consequently, the target price for CHINA RES POWER was reduced by 11.6% to $19 from $21.5.