[ET Net News Agency, 9 October 2019] UBS Global Research lowered its target price for
China Resources Power (CRP)(00836) to HK$9.6 from HK$12.3 to reflect declining average
tariff and maintained its "neutral" rating.
The research house said the current 6% dividend yield, though similar to its three-year
average, is not high enough to offset the risks of earnings uncertainty and the change of
dividend policy three years ago from a guaranteed DPS to a payout ratio.
On a P/BV basis, although its current 0.6x 2020E P/BV appears undemanding versus a 10%
ROE, UBS believes delays in subsidy collections at its wind farm business remain a key
overhang.
It cut its 2019-2021 earnings forecasts by 17%/12%/15% to factor in (1) CRP's 1H
results, (2) rising percentage of competitive-market sales and potentially lower tariffs
due to the proposed "base tariff + floating tariff" scheme, and (3) higher coal price
estimates for 2019. (KL)
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00836 CHINA RES POWER
Nominal 
19.700 +0.180 (+0.922%) Research Report
09/10/2019 17:39
{I-bank focus}UBS lowers CR Power (00836) to HK$9.6
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