Daily Investment Strategy
Daily focus：China Resources Power（836）
China Resources Power's business is concentrated in the Chinese domestic market, with relatively low political risks. The company plans to add 10 GW of renewable energy capacity (a yoy increase of 28.4%), which is a significant improvement compared to the performance in 2024 when it failed to meet the target. The prospects for coal-fired power generation business are promising, and the profit gap is expected to widen further, with unit fuel costs expected to fall by 7-8%, or even more. Capital expenditure will reach HK$56.8bn (up 6.4% year-on-year). Overall, despite the pressure of downward adjustment in electricity prices from renewable energy, improvements in coal-fired business and expanded renewable energy installed capacity will support performance growth in 2025.
President Trump threatens more China tariffs
President Trump has escalated the US-China trade conflict by threatening an additional 50% tariff on Chinese imports if Beijing fails to withdraw its retaliatory 34% tariff by April 8, 2025. This development follows Trump’s “Liberation Day” tariff announcement on April 2, which imposed a 34% duty on Chinese goods effective April 9, on top of the existing 20% tariff implemented in January. China responded with matching 34% tariffs on US products scheduled for April 10, prompting Trump’s ultimatum via Truth Social. If implemented, Chinese imports would face a cumulative 104% tariff rate. Trump has also threatened to terminate all bilateral discussions, accusing China of currency manipulation, illegal subsidies, and unfair trade practices. Beijing has already restricted rare earth exports and is preparing economic countermeasures, with high-ranking officials unsuccessfully attempting to initiate dialogue for months. The escalating tensions have significantly destabilized financial markets, with economists warning that these measures could impede economic growth, potentially trigger a recession, and reignite inflation as importers pass higher costs to consumers.
The Hong Kong Stock Connect saw a net inflow of HK$15.4bn on Monday, of which Xiaomi (1810) had the largest net inflow of HK$2.5bn, followed by Tencent (0700); Alibaba (9988) saw the largest net outflow of HK$2.0bn, followed by Xpeng Motors (9868).
Cheung Cho Shing, Joseph is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/ACQ030/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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