<div id="readability-page-1"><div>Citi released a research report stating that although coal prices have risen, share prices of Chinas coal-fired independent power producers (IPPs) have still climbed 20% over the past three months. The bank believes this was mainly driven by tariff hikes in certain regions due to rising costs, spillover effects from gains in US power utilities amid electricity shortages, fund inflows related to AI investments, the sectors prior underperformance in the equity market, and expectations of high dividend yields in 2025.The bank expects investors to focus more on the fundamentals of companies in the sector, forecasting that margins will narrow due to higher coal costs. Coupled with the ex-dividend period for July payouts, performance is likely to weaken. The bank assigned Sell ratings to HUANENG POWER (00902.HK) +0.020 (+0.303%) Short selling $98.11M; Ratio 22.407% , CHINA RES POWER (00836.HK) -0.060 (-0.294%) Short selling $26.46M; Ratio 9.194% and HUADIAN POWER (01071.HK) +0.010 (+0.220%) Short selling $9.25M; Ratio 16.473% . (sl/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-14 16:25.)</div></div>

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Citi's research report indicates that while coal prices have risen, China's coal-fired independent power producers (IPPs) saw a 20% increase in share prices over the past three months. However, Citi forecasts that margins will narrow due to higher coal costs, leading to weaker performance. The bank assigned Sell ratings to HUANENG POWER, CHINA RES POWER, and HUADIAN POWER, citing a focus on company fundamentals and the impact of the upcoming ex-dividend period.

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Citi Expects Power Stocks to Underperform on Rising Coal Costs Squeezing Margins