Bank of America Merrill Lynch: Upgrades China General Nuclear Power's rating to "Buy", bearish on State Power Investment Corporation, China Huaneng Group, and China Longyuan Power Group.

Bank of America Securities released a report stating that high energy prices, the El Nio phenomenon, and the direct power supply model have driven the performance of independent power generation companies. In the past month, related H shares have risen by an average of about 15%, with thermal power stocks leading the gains. However, the bank believes that the impact of rising coal costs will outweigh potential electricity price increases, leading to a decrease in thermal power profits. The current valuations already reflect expectations of stable or moderately rising electricity prices. The scale of direct supply of green electricity remains too small, and there is uncertainty about economic benefits, making it difficult to support profitability. The bank maintains a "underperform" rating for China Huaneng, Huadian, and Longyuan Power. The bank is more confident in the profit recovery of nuclear power, and based on policy support for electricity prices, controllable fuel costs, and attractive valuations, it has upgraded its investment rating for CGN Power from "underperform" to "buy," with a target price raised from 3 Hong Kong dollars to 3.9 Hong Kong dollars.