Independent Power Producers

Independent Power Producers

Postby winston » Tue Jan 20, 2009 12:23 pm

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%.
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Re: Independent Power Producers

Postby winston » Tue Jan 20, 2009 4:38 pm

DJ MARKET TALK:China IPP Valuations Now At Attractive Levels-Macq

1515 [Dow Jones] Four of 5 HK-listed China IPPs down, mostly performing in-line with HSI's 1.9% decline. Macquarie notes share prices of IPPs have corrected in recent weeks amid uncertainties surrounding 2009 coal contracts; says valuations "now back to more attractive levels in terms of P/BV."

Keeps Outperform ratings on Huaneng Power (0902.HK), Datang Power (0991.HK), CR Power (0836.HK) with Huaneng as top pick, target price HK$5.80.

On coal contract negotiations with coal producers, expects negotiations could drag out to as late as March without NDRC interference, given current standoff. Huaneng down 2.4% at HK$4.78
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Re: Independent Power Producers

Postby winston » Wed Jan 21, 2009 2:35 pm

DJ MARKET TALK: MS Upgrades China Power Sector To Attractive

1239 [Dow Jones] STOCK CALL: Morgan Stanley upgrades China's power sector to Attractive from In-Line, says coal-cost savings will outweigh weaker demand.

House ups Huaneng Power (0902.HK) to Overweight vs Equalweight, target +67% to HK$6.50; raises Datang Power (0991.HK) to Equalweight vs Underweight, target +77% to HK$3.90. Also ups Huadian Power (1071.HK) target 19% to HK$1.90, keeps Equalweight; raises China Resources Power (0836.HK) target to HK$17.90 vs HK$16.20, keeps Overweight.

Tips China spot coal prices to fall further to CNY500/ton by end-2009 vs nearly CNY600/ton currently, on lower demand after winter, restart of coal production, increase in hydro generation. Expects China's power demand +2% this year, rebound won't appear until 2H; plant utilization may fall 10%.
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Re: Independent Power Producers

Postby winston » Thu Jan 22, 2009 9:15 am

Brighter outlook for power firms
Kathy Wang

The prospects of China's industrial power producers are likely to improve this year on the back of government capital support and cheaper coal, market watchers say.

The State-owned Assets Supervision and Administration Commission has confirmed it will provide 10 billion yuan (HK$11.34 billion) to the power sector. This includes a capital injection to five major power companies and two state power grid firms.

"We believe the industrial power producers will turn profitable this year, mostly benefiting from lower coal prices," said UOB Kay-Hian analyst Shi Yan. "A big boost for profits, nevertheless, will come from an economic recovery." Shi said the capital injection would not be "that significant," but she believed power producers will not have to worry about coal prices soaring this year. The scale of the profits will depend on demand for power. Energy output in the mainland declined 6 percent last month after a record 9 percent plunge in November.

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"We continue to believe that demand for winter heating, falling port inventory, and coal output cuts can cushion spot price slides in the short term, but they cannot change the trend of spot price weakness due to continuous slowdown in industrial output and power demand," Nomura analysts Ivan Lee and Evan Li said in an earlier report.

Datang Power (0991) climbed 0.29 percent yesterday, Huaneng Power (0902) surged 3.1 percent and Huadian Power (1071) was unchanged.
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Re: Independent Power Producers

Postby winston » Thu Feb 19, 2009 1:59 pm

Chinese power producers rose as spot coal prices in China eased while industry watchers said that demand may recover in the near term with weak January data indicating a bottom for power demand. [/b

Huaneng Power (0902.HK) moved up 5.4 percent to HK$5.45 while Datang International Power (0991.HK) gained 4.4 percent to HK$3.76. China Resources Power (0836.HK) climbed 5.3 percent to HK$14.82.

According to data released last week, [b]China's power demand fell 13 percent in January but the figure was likely distorted by the week-long Chinese New Year holiday which fell in February last year
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Re: Independent Power Producers

Postby winston » Thu Feb 19, 2009 2:42 pm

DJ MARKET TALK: Nomura Tips China Power Demand May Recover Soon

1211 [Dow Jones] China's demand for power may be showing signs of recovery after pace of on-year industrial demand decline slows to 4.6% in January (on per-day basis, excluding Chinese New Year holiday) vs December's 9.5% fall, with January's kWh demand topping December's, Nomura says.

But recommends waiting for February data to confirm if bottom has been reached. Adds, sustainable demand recovery isn't far away though, as Beijing's massive stimulus package will likely show effects in 2Q.

House says China spot coal prices will likely continue to fall through 2Q despite demand recovery, as more new coal mines will start producing, coal exports will also stay weak as overseas demand is falling
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Re: Independent Power Producers

Postby winston » Fri Mar 06, 2009 2:33 pm

DJ MARKET TALK: CLSA Keeps Huaneng Power As Top China IPP Pick

1222 [Dow Jones] STOCK CALL: CLSA keeps Huaneng Power (0902.HK) as top pick among China IPPs, on diversified geography, high earnings sensitivity to falling coal costs. House tips China may cut power tariffs by up to 5% in 2H, following 44% drop of spot coal prices from mid-2008 peak; expects whole sector to turn profitable this year, as lower coal costs will outweigh weaker power demand.

Adds, Guangdong may be first province to cut tariffs, China Resources Power (0836.HK) likely to be hit most. Keeps Huaneng at Buy, target at HK$5.88; stock down 2.3% at HK$5.14. Keeps CR Power at Underperform, says stock is trading at stretched valuation of 2.1X 2009 P/B, highest among China IPPs, target stays at HK$13.80; shares down 1.8% at HK$14.18.
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Re: Independent Power Producers

Postby winston » Thu Mar 12, 2009 2:34 pm

DJ MARKET TALK: CIMB Rates China IPPs Overweight; Tips Positives

1215 [Dow Jones] CIMB tips China IPPs "seeing the light of day," expects more positive factors for China IPPs to emerge in next few months: expects power consumption will continue to improve gradually; likely more interest rate cuts, which will benefit highly geared IPPs; domestic coal prices will continue falling.

While major overhang is contract coal price negotiations, house expects this year's contract price to be unchanged from 2008's, as coal demand weak, coal price in international market sluggish; tips coal supply contracts likely to be signed at end March or early April when low season starts.

Keeps Overweight call on sector; keeps Huaneng Power (0902.HK), CR Power (0836.HK) at Outperform, target prices HK$5.80, HK$21.80 respectively. Huaneng down 2.5% at HK$5.09, CRP off 2.1% at HK$14.00
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Re: Independent Power Producers

Postby winston » Wed Aug 04, 2010 8:08 am

Chinese IPP

Not vested.

DJ MARKET TALK: Nomura Keeps Positive On China's Coal Industry

1242 [Dow Jones] STOCK CALL: Nomura remains positive on China's coal industry given balanced-to-tight supply, strong demand outlook, intermittent transportation bottlenecks, accelerated industry consolidation.

Adds, demand strength attributable to accelerating GDP growth, thinks limitations on coal imports would support Qinhuangdao spot coal at premium to Australian prices.

Despite attractive-looking valuations, rates China independent power producers Neutral as higher coal costs, interest rates in 2010 could offset gains from utilisation.

Recommends China Resources Power (0836.HK) as house thinks its ROE-spread over peers should expand during market turbulence. House also likes Huaneng (0902.HK) given undemanding valuations. Keeps China Resources Power, Huaneng at Buy, Neutral on Huadian (1071.HK), Datang (0991.HK), China Power International (2380.HK).

Source: Dow Jones Newswire
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Re: Independent Power Producers

Postby winston » Thu Sep 16, 2010 12:47 pm

Chinese IPP. Not vested.

DJ MARKET TALK: China IPPs Rally; Tariffs Hike Likely - Citigroup

1204 [Dow Jones] HK-listed China IPPs outperforming broader market, led by Datang Power (0991.HK), Huadian Power (1171.HK); both up more than 4% after Citigroup analyst Pierre Lau says in note Thursday NDRC recommended increase in on-grid tariffs of coal-fired power plants in 7 provinces by CNY15-CNY25 per megawatt-hour, all natural gas-fired plants by CNY30/MWh.

China's economic planning agency met representatives of 5 biggest power producers Tuesday to discuss proposal, Lau says, without mentioning how he got information.

Lau adds, tariff hike would be implemented in October if approved by State Council, and inflation is in check.

Huadian Power company Secretary Zhou Lianqing says he didn't have any details of meeting with NDRC; announcement from government, officials from Datang, China Resources Power (0836.HK) say they had no knowledge of potential tariff hikes.

Source: Dow Jones Newswire
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