In today’s briefing:
- Compare and Contrast: Energy China 中国能建 (3996 HK/601868 CH) And Power China 中国电建 (601669 CH)
- Macro; Rating Changes; New Issues; Talking Heads; Top Gainers and Losers
Compare and Contrast: Energy China 中国能建 (3996 HK/601868 CH) And Power China 中国电建 (601669 CH)
- China Energy Engineering (3996 HK) and Power Construction Corporation Of China (601669 CH) are the two giants in power construction industry in China; but there are significant differences between them.
- Power China has better business and generation mix while Energy China won in terms of margin and profitability, leverage and financial position, new order momentum and hydrogen energy expansion.
- We like Energy China “H” for cheap valuation, secured earnings and deep discount to Energy China “A”. For just the A-shares, we prefer Power China “A” to Energy China “A”.
Macro; Rating Changes; New Issues; Talking Heads; Top Gainers and Losers
US equity markets were closed due to President’s Day holidays. The US 10Y Treasury yield dropped 6bp to 1.93%. Risk-off Russia-Ukraine sentiment however continues to weigh on markets with the European markets closing lower – DAX, CAC and FTSE were down 2.1%, 2% and 0.4% each. Brazil’s Bovespa closed 1% lower. In the Middle East, UAE’s ADX was down 1.2% while Saudi TASI closed 0.8% higher. Asian markets have opened lower again today with Shanghai, HSI, STI and Nikkei down 1.2%, 3%, 0.8% and 2.2% respectively. US IG CDS spreads were 0.9bp wider and HY CDS spreads were 4bp wider. EU Main CDS spreads were 2.4bp wider and Crossover CDS spreads were 6.7bp wider. Asia ex-Japan CDS spreads were 0.7bp wider.
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