DJ MARKET TALK: UOB Keeps Chinese Power Sector At Underweight
1152 [Dow Jones] STOCK CALL: HK-listed China IPPs extend gains after Citigroup analyst said Thursday China's economic planner has recommended increase in electricity prices in 7 provinces in China next month.
Still, UOB KayHian keeps Chinese power sector at Underweight; "we recommend investors to take profit as we believe the potential tariff hikes, even if implemented, will only be a one-off positive that is likely to be short-lived as the sector's fundamentals will continue to be weighed down on rising coal cost and inefficient cost pass-through," says house.
Adds, Datang (0991.HK) and Huadian (1071.HK) may extend gains due to their high earnings sensitivity towards tariff changes. However, house maintains Sell on both stocks; says they are still unattractive even assuming there is tariff hike. Datang last +3.3% at HK$3.47; Huadian +4.5% at HK$2.09.
Source: Dow jones Newswire