Bank of America Securities released a research report maintaining a buy rating on the China Yangtze Power (01038), stating that 90% of its profits come from the overseas market, enjoying exchange rate advantages. It is expected that the company's financial costs may decrease, and its return is attractive in the commonly expected interest rate reduction environment. The target price has been raised from HKD49.4 to HKD49.9.
The report stated that the company is considering a potential secondary and additional listing of its shares on overseas stock exchanges without any fundraising, expecting to enhance the company's image, provide a broader market for the trading of the company's shares, and benefit shareholders in different regions. On the other hand, the Water Services Regulation Authority (Ofwat) of the United Kingdom has published a draft decision on regulated water assets, and the company's subsidiary, Northumbrian Water, is allowed a equity cost of 4.8% during the 2025-2030 regulatory period, better than the market expectation.
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