Sept. 27 (Bloomberg) -- China Resources Power Holdings rose the most in almost three months in Hong Kong trading after Goldman Sachs Group Inc. increased its target price for the stock.

China Resources Power jumped as much as 12 percent and closed at HK$21.75, a gain of 8.5 percent. Goldman boosted the target price to HK$29.00 from HK$23.50, analyst Franklin Chow wrote in a research note yesterday.

The utility has built plants and bought generation assets to increase capacity as the world's fastest-growing major economy strives to end power shortages. First-half net income surged 41 percent to HK$1.4 billion ($180 million), the Hong Kong-based utility said Aug. 20.

``China Resources Power's strong earnings growth potential is deeply undervalued,'' Chow said in the research note. The company ``is the best in its class.''

The power producer is able to effectively control costs, offset rising coal expenses and create value through capacity expansions and mergers and acquisitions, Chow said.

Generating capacity will rise 67 percent to 20,000 megawatts in 2010 from this year's level, China Resources Power's Chief Financial Officer Wang Xiao Bin said last month. Capacity will increase to 15,000 megawatts next year and 18,000 megawatts by the end of 2009, she said.

The company owned power generating capacity of 8,741 megawatts by the end of the first-half, 41 percent more than at the same stage last year.

China Resources Power is the second-best performing Hong Kong-listed power producer this year. It has advanced 85 percent, trailing only Datang International Power Generation Co., which has more than doubled.

To contact the reporter on this story: Ying Lou in Hong Kong at ylou1@bloomberg.net

Last Updated: September 27, 2007 04:30 EDT