Core Viewpoint - Morgan Stanley has adopted a more cautious outlook on China's thermal power utilities, downgrading the rating of China Resources Power from "Overweight" to "Neutral" and reducing the target price from HKD 21.5 to HKD 17. The firm maintains a "Underweight" rating on Huaneng Power International, lowering the H-shares target price from HKD 4.85 to HKD 4.5 [1] Group 1 - The removal of the electricity price floor may lead to a further decline in the on-grid electricity price for thermal power starting in 2027, which could compress the profit margins of the companies covered by the firm [1] - The government has mentioned plans to improve the capacity pricing mechanism, but there is significant uncertainty regarding the strength, implementation timing, and whether it will be sufficient to offset the decline in base electricity prices [1] - The profitability outlook for thermal power plants has become unfavorable, with expected downward risks to market earnings forecasts and dividend predictions [1]