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The 2014 All-Asia Research Team: Power, No. 1: Pierre Lau & team

Pierre Lau & team
Citi
First-Place Appearances: 9

Total Appearances: 10

Team Debut: 1996

Pierre Lau, 43, guides his Citi squad to first place on this lineup for an eighth consecutive year. “In May 2013 he was the one and only sell-side analyst signaling tariff cuts of China power companies, which happened in September,” asserts one portfolio manager. In addition, the team “has been a convenient one-stop shop, serving comprehensive and accurate government policy insights, sector view updates as well as money-making stock calls,” adds another backer. Asia’s power companies, notes Hong Kong–based Lau, “had a roller coaster ride in 2013, when a sharp rally from January to May, due to coal-price declines, was followed by a sharp drop on tariff-cut concerns.” After China’s power plants raised the price at which they sell electricity to the grid companies, the shares rallied again. From September through late April, the sector climbed 6.7 percent — with Chinese names up 14.9 percent — against the regional broad market’s 2.2 percent gain. Lau and his nine-person team are positive going forward, citing low coal prices amid ample supply and a discounting of the tariff-cut risk. From their bases in Hong Kong, Jakarta, Kuala Lumpur, Mumbai and Seoul, the analysts report on 50 stocks. Favorite players include Hong Kong–based China Resources Power Holdings Co., which they forecast will enjoy the fastest capacity growth of any Chinese coal-fired power company, at 16 percent annually in 2014 and 2015. Their target price for the shares is HK$26.50, which represents a 33.3 percent premium to their late April value. Similarly, they expect Chinese state-owned electric utility Huaneng Renewables Corp. to increase capacity by more than 30 percent year over year in 2014, so recommend buying the stock. It traded at HK$2.64 in late April, and they project it can rise as high as HK$3.60.


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