China Power fell 3% for Shenwan long line industry preferred short call

Chinese electricity, which was injected by the parent company with nearly 4.5 billion yuan in hydropower assets, was stabilized after a sharp fall in the market this morning, with shares falling 2.59% to HK $2.63 in half a share and 31.82 million shares.　　Wanguo issued a report saying the unit was downgraded to neutral, but raised its target price to HK $2.75, a 5% per cent premium to market value. Wanguo that, assuming that the acquisition completed within three months and the five-ling level of power profitability back to 2007 levels, China's electricity in 09 expected earnings per share will be diluted from RMB 0.21 to 0.17 yuan. Stock prices are now 16 times times, 14 times times the 09 and 10 earnings ratios, slightly above the power sector's average of 15 times and 12 times times. However, due to the acquisition of hydropower assets, the level of profit valuation should be higher than thermal power assets, the current premium level appears more reasonable. In the long run, due to its stable cost control and profitability, hydropower asset acquisition brought about by the power generation business structure optimization, Wanguo said that China's electricity is still the industry's first glare but in terms of short-term valuations, Wanguo said the unit has risen by more than 40% per cent in nearly one months since its recommendation. Prices are now more reasonable and the market is fully aware of the benefits of acquisitions. If the share price is stimulated by the merger announcement, investors are advised to sell at high prices.