The analyst rating for CHINA POWER (02380.HK) was reiterated at Neutral by BofA Securities due to a combination of factors. Although the target price was increased from $3.1 to $3.5, the broker lowered its earnings forecasts for 2025-2027 by an average of 2%, citing lower-than-expected power tariffs. The management of the Jiangsu Changshu power plant, in which CHINA POWER holds a 50% stake, anticipates a decrease in the annual contract power tariff by RMB5-6 cents next year, influenced by lower coal prices and a higher capacity tariff. Additionally, the power plant plans to reduce its reliance on annual contracts and increase spot market trading, which they believe will help secure better tariffs. Overall, while earnings are expected to remain broadly stable year-over-year in 2025, the adjustments in forecasts and tariff expectations led to the Neutral rating.
