DJ MARKET TALK: Fincl Aid May Help Lower China IPPs' Gearing -UBS
1102 [Dow Jones] Government injection of capital into China IPPs, if happens, will reduce investor concerns over high gearing levels, UBS says. Says money likely go to parent companies, not listed firms, but adds, "if an injection was to be given to the listcos through A-share placement, it could be value-accretive for the H shares, given the sharp A-H premium."
Adds, IPP shares have fallen to close to 1X P/BV, which is "better sector entry point," as weaker coal prices boost earnings.
Says China Resources Power (0836.HK), Huaneng Power (0902.HK) remain sector top picks; CR Power down 3.5% to HK$13.38, Huaneng off 2.9% at HK$4.76, vs HSI down 3.2%.