Citigroup has released a report, raising the target price for China Power International (02380.HK) from 3.7 yuan to 4.3 yuan, maintaining a 'buy' rating. This is based on the rapid recovery of hydropower plant utilization rate, which increased 85.2% in the first five months of this year with 1,350 hours of usage; the decrease in unit coal costs may exceed the company's guidance of a 3% to 5% year-on-year decline; and the expected growth of higher photovoltaic and wind power generation, which is expected to increase by 7 gigawatts this year. Product structure, 10-30 billion yuan products operating income of 401/1288/60 million yuan respectively.

The bank has raised the company's net profit forecast for the years 2021 to 2026 by 1% to 2%, reflecting the increase in hydropower generation and the decrease in unit fuel costs, despite the decline in wind power utilization rate. The bank believes that the expected dividend yield of 5.6% this year is attractive.

The bank predicts that China Power's net profit for the first half of the year will increase by 62% year-on-year to RMB 2.714 billion, in line with the bank's expectation of high profit growth for the company this year, driven by high growth in power output and a decline in coal costs. The company's net power generation in the first five months of this year increased by 32.7% year-on-year to 52.5 billion kilowatt hours, including hydropower generation, which increased by 85.2% year-on-year to 8 billion kilowatt hours, as well as wind and photovoltaic power generation, which increased by 68.7% year-on-year to 20.5 billion kilowatt hours.