GLONGHUI, September 9 | Jefferies said it continues to have a positive view on power stocks, especially as investors enter a cycle of interest rate cuts between China and the US, and continue to seek defensive shares with stable basic factors in the A/H share market. The bank favors hydropower, coal power, wind power and photovoltaic stocks in the second half of the year. Based on strong water flow and strong demand for electricity in the third quarter during the summer, the risk of hydropower being affected by feed-in tariffs is the lowest, especially when feed-in tariffs are falling. The bank reiterated its “buy” rating for China Electric Power. The target price was raised from HK$4.13 to HK$4.36, indicating that the company benefited from improvements in hydropower generation in the second half of the year and management promised shareholder returns. The stock returned 7.8% with special interest. Among private power plants, the bank favors China Resources Electric Power, with a “buy” rating. The target price was raised from HK$22.4 to HK$23.72, indicating that the company involved coal power and had a 6% dividend, which was commensurate with the quality of its stock. The bank downgraded Huaneng Guodian's rating to “hold”. The target price was lowered from HK$5.71 to HK$4.49, based on dividend uncertainty and concerns about the decline in market-dominant coal and electricity feed-in prices and asset depreciation. The bank also downgraded the rating of Longyuan Power to “hold”, and the target price was lowered from HK$6.71 to HK$5.72, focusing on the decline in feed-in tariffs for renewable energy dominated by the market.