Citi Lowers CGN Power Target Price by 23% to HK$2.45, Maintains Sell Rating

Stock News07-14

Citi has issued a research report, significantly reducing its price target for CGN POWER (HKG: 01816) by 23.4% from HK$3.20 to HK$2.45, while reiterating its Sell rating.

The bank highlighted that in the first half of 2026, the company's on-grid electricity generation saw an annual decline of 3.3% to 109.6 million megawatt-hours, with the average plant utilization rate falling 6.1% year-on-year to 3,554 hours.

Conversely, the proportion of electricity sold at market prices increased by 9.8 percentage points year-on-year to 65.9%.

Citi forecasts that due to the rising share of market-priced electricity sales, CGN Power's net profit for the second quarter of 2026 will decrease by 7.8% year-on-year to RMB 2.7 billion.

The bank noted that the impact of higher Guangdong spot electricity prices in Q2 on CGN Power is limited, as over 95% of its market sales are conducted through long-term contracts.

Considering the reduced power generation stemming from lower plant utilization, Citi has consequently lowered its net profit forecasts for CGN Power for the years 2026 through 2028 by 3% to 6%.

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