The pullback in the share prices of mainland Chinese power stocks last week was not be driven by any fundamental reasons, but due to the lack of Southbound investor capital flows caused by the Dragon Boat Festival holiday, Daiwa Securities said in a note
The broker suggested that investors to buy on dip and said capital inflow is expected to return to normal after Southbound trade resumes.
Daiwa upgraded China’s power sector from Negative to Positive. China Power International Development was upgraded from Outperform to Buy, but its target price was lowered from HK$4.1 to HK$3.9. China Longyuan (00916.HK) ‘s target price was reduced from HK$12 to HK$11, with Buy rating kept unchanged. China Datang Corporation Renewable Power and China Resources Power were both upgraded from Hold to Outperform, with target price of $3.15 and $18.8 respectively.