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Investing.com - UBS upgraded CGN Power Co Ltd. (HK:1816) (OTC:CGNWF) from Sell to Neutral on Thursday, while raising its price target to HK$3.40 from HK$2.30.
The upgrade reflects UBS’s view that CGN Power is well-positioned to benefit from China’s accelerating deployment of small modular reactors (SMRs) and the company’s longer-term participation in nuclear fusion development.
UBS’s earnings per share forecasts for 2025-27 remain 11% below consensus, acknowledging near-term earnings pressure for the Chinese nuclear power producer.
The firm cited ongoing caution regarding downside risks, specifically pointing to declining market-based power tariffs and rising uranium procurement costs that could impact CGN’s performance.
At 1.1x 2026E price-to-book value, based on a 7% return on equity and 3.1% forward dividend yield, UBS considers CGN Power fairly valued, with long-term technology optionality balanced against structural margin pressure.
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