Citibank: Raise CGN Power Co.'s target price to HK$3.2, this year's forecast dividend yield is not attractive enough.

Citigroup released a research report indicating that the new electricity pricing mechanism for nuclear power in Liaoning Province is good news for CGN Power, helping to reduce its electricity price uncertainty in the region. About 70% of its output can be sold at a fixed electricity price, and a similar mechanism may also be implemented in Fujian this year. Citigroup believes that this will help alleviate the downward risk of CGN Power's electricity prices, and has therefore raised the group's net profit forecast for the next two years by 5% and 1%, respectively, to reflect the impact of reduced electricity price cuts. The bank believes that CGN Power's forecast dividend yield for this year is only 2.9%, which is not attractive enough, and maintains a "sell" rating on it, with a target price raised from 2.6 Hong Kong dollars to 3.2 Hong Kong dollars.