CMB: Upgrades HUANENG POWER (00902) rating to "buy" with target price raised to 5.2 Hong Kong dollars.

Standard Chartered released a research report stating that they have upgraded HUANENG POWER (00902) from a "hold" rating to a "buy" rating, with a target price increased from 4.4 Hong Kong dollars to 5.2 Hong Kong dollars. They also estimated that the company's profit for the 2025 fiscal year will increase by 43%, mainly supported by the decrease in fuel costs. The report mentioned that after adding 9.7 gigawatts of capacity in the 2024 fiscal year, Huaneng Power International, Inc. plans to add approximately 14 gigawatts of clean energy capacity in the 2025 fiscal year, with around 10 gigawatts coming from wind energy or CECEP Solar Energy. The bank estimates that this will increase the company's electricity generation by 6% in the 2025 fiscal year. Assuming an average electricity price decrease of 4.5% to 10%, the company's electricity sales revenue in the Chinese market is expected to grow by 1.4% in the 2025 fiscal year. Standard Chartered stated that despite the limited growth in electricity sales revenue, they expect Huaneng Power International, Inc.'s EBIT profit margin to increase by 2.8 percentage points to 12.6% in the 2025 fiscal year. As for the first quarter of the 2025 fiscal year, due to weak demand and increased supply, the average coal price fell by 20%. The bank predicts that the current downward trend in coal prices will lead to a 7.5% decrease in the company's fuel costs.