JPMorgan's Downgrade: JPMorgan has downgraded CHINA RES POWER from Overweight to Neutral and reduced its target price, while maintaining an Underweight rating for HUANENG POWER with a lower target price.

Impact of Price Floor Removal: The removal of the electricity price floor is expected to lead to further declines in on-grid electricity prices for thermal power, potentially compressing profit margins for these companies.

Uncertainty in Tariff Mechanism: Despite the Chinese government's mention of improving the capacity tariff mechanism, there is significant uncertainty regarding its effectiveness and implementation timing.

Negative Earnings Outlook: The earnings outlook for thermal power plants is unfavorable, with market forecasts and dividend predictions facing downside risks.

Challenges in China's Power Industry: HSBC Research indicates that China's power industry will experience weakened growth momentum in the first year of the 15th Five-Year Plan due to declining electricity prices, a slowdown in new installations, and a stabilizing policy environment.

Downgrades and Ratings: HSBC has downgraded HUANENG POWER from Hold to Underweight and CHINA RES POWER from Buy to Hold, reflecting concerns over their earnings forecasts.

Optimism for CHINA LONGYUAN: The report expresses optimism for CHINA LONGYUAN, anticipating that its earnings growth will lead the industry, driven by strong performance in wind resources.

Attractive Dividend Yields: CHINA POWER is projected to have a 5.8% dividend yield in FY26, while CHINA YANGTZE POWER is expected to yield about 3.7%, making them attractive options among their peers.

EPS Forecast Adjustment: Morgan Stanley has lowered its 2026/2027 EPS forecasts for China Res Power from $3.49/$3.58 to $2.98/$3.08 due to anticipated lower tariffs.

Target Price Update: The brokerage increased its target price for the company from $23.7 to $23.8, based on a price-to-earnings ratio of 8x, reflecting a valuation extension to 2026.

Investment Rating: Morgan Stanley maintained an Overweight rating for China Res Power, citing its superior utilization hours for coal and wind power projects compared to peers.

Dividend Yield Stability: Despite potential tariff pressures in 2025, the company's secure dividend yield makes it an attractive option for investors.

Citi Research Downgrade: Citi Research downgraded CHINA RES POWER from Buy to Neutral, reducing its 2026/2027 net profit forecasts by 8.3% and 7.9% respectively due to a new contract with Guangdong Province.

Price Forecast Adjustments: The broker lowered its coal-fired power price forecast by 3.5% YoY for 2026 and increased the unit fuel cost for coal-fired plants, indicating a shift in market expectations.

Target Price Reduction: Citi Research decreased its target price for CHINA RES POWER by 11.6%, from $21.5 to $19, based on discounted cash flow (DCF) valuation.

Market Outlook: The report suggests a more favorable outlook for Chinese power equipment suppliers compared to power generation operators, who may face declining profit margins due to lower electricity prices.

Stock Performance Overview: Various Chinese energy stocks show mixed performance, with CHINA RES POWER and CGN POWER experiencing declines, while HUADIAN POWER and CHINA SUNTIEN report gains.

Short Selling Activity: Significant short selling activity is noted across several stocks, with CGN POWER having the highest short selling ratio at 34.136%, indicating bearish sentiment among investors.