Citi's analyst rating for CGN Power is based on the positive impact of a new nuclear power pricing mechanism in Liaoning Province, which reduces electricity price uncertainty. With about 70% of CGN Power's output sold at fixed prices, this development alleviates downside risks for the company. Consequently, Citi has raised its net profit forecasts for CGN Power for this year and next, despite maintaining a 'Sell' rating due to an unattractive forecast dividend yield of 2.9%. The target price has been increased from HKD2.6 to HKD3.2.
