reports
- Jennifer Song
Morningstar | Huaneng’s Strong 1Q in Line; Falling Coal Price Will C...
No-moat Huaneng’s strong first-quarter result, with net profit rising 114% to CNY 2.65 billion under PRC GAAP, was largely driven by falling coal prices, while its power output and average tariff remained largely flat from a year ago. This was well-expected, and an 8% fall in Huaneng’s unit coal cost drove its gross margin expansion of 4.8% in first-quarter 2019, to 18.3%, the best since third-quarter 2016. In addition, higher heating income, as well as the one-off noncash gains from the con...
- Jennifer Song
Morningstar | Huaneng’s Strong 1Q in Line; Falling Coal Price Will C...
No-moat Huaneng’s strong first-quarter result, with net profit rising 114% to CNY 2.65 billion under PRC GAAP, was largely driven by falling coal prices, while its power output and average tariff remained largely flat from a year ago. This was well-expected, and an 8% fall in Huaneng’s unit coal cost drove its gross margin expansion of 4.8% in first-quarter 2019, to 18.3%, the best since third-quarter 2016. In addition, higher heating income, as well as the one-off noncash gains from the con...
- Jennifer Song
Huaneng’s Strong 1Q in Line; Falling Coal Price Will Continue to Dri...
No-moat Huaneng’s strong first-quarter result, with net profit rising 114% to CNY 2.65 billion under PRC GAAP, was largely driven by falling coal prices, while its power output and average tariff remained largely flat from a year ago. This was well-expected, and an 8% fall in Huaneng’s unit coal cost drove its gross margin expansion of 4.8% in first-quarter 2019, to 18.3%, the best since third-quarter 2016. In addition, higher heating income, as well as the one-off noncash gains from the con...
- Jennifer Song
Morningstar | Huaneng Posts a Disappointing 2018 Result; Cutting FVE t...
No-moat Huaneng’s disappointing 2018 full-year result, with net profit falling 54% to CNY 734 million, was largely driven by a CNY 1.6 billion impairment. Core operations also missed slightly on higher-than-expected fuel cost, despite a decent 9% growth in power output and marginally improved power price. This indicates that coal-fired IPPs have little bargaining power over coal miners, and there is little flexibility to pass on the higher coal costs. However, we retain our bearish outlook on ...
- Jennifer Song
Morningstar | Huaneng Posts a Disappointing 2018 Result; Cutting FVE t...
No-moat Huaneng’s disappointing 2018 full-year result, with net profit falling 54% to CNY 734 million, was largely driven by a CNY 1.6 billion impairment. Core operations also missed slightly on higher-than-expected fuel cost, despite a decent 9% growth in power output and marginally improved power price. This indicates that coal-fired IPPs have little bargaining power over coal miners, and there is little flexibility to pass on the higher coal costs. However, we retain our bearish outlook on ...
- Jennifer Song
Huaneng Posts a Disappointing 2018 Result; Cutting FVE to HKD 5.20 on ...
No-moat Huaneng’s disappointing 2018 full-year result, with net profit falling 54% to CNY 734 million, was largely driven by a CNY 1.6 billion impairment. Core operations also missed slightly on higher-than-expected fuel cost, despite a decent 9% growth in power output and marginally improved power price. This indicates that coal-fired IPPs have little bargaining power over coal miners, and there is little flexibility to pass on the higher coal costs. However, we retain our bearish outlook on ...
- Jennifer Song
Morningstar | Cross-Provincial Power Supply Weighs on Coal-Fired IPPs;...
Despite a nationwide slowdown in power consumption growth, China Resources Power's operating performance in November lagged industry peers, with power sales volume falling 8.4% year over year versus 3.6% nationwide growth. This was largely driven by an 8.8% decline in the firm’s coal-fired power output, reflecting rising pressure coming from the cross-provincial power supply amid stricter environmental controls in coastal regions. This is in line with our expectations, and we expect west-to-ea...
- Jennifer Song
Cross-Provincial Power Supply Weighs on Coal-Fired IPPs; Falling Coal ...
Despite a nationwide slowdown in power consumption growth, China Resources Power's operating performance in November lagged industry peers, with power sales volume falling 8.4% year over year versus 3.6% nationwide growth. This was largely driven by an 8.8% decline in the firm’s coal-fired power output, reflecting rising pressure coming from the cross-provincial power supply amid stricter environmental controls in coastal regions. This is in line with our expectations, and we expect west-to-ea...
- Jennifer Song
Morningstar | Falling Coal Price Will Be a Key Growth Driver for Huane...
Huaneng Power International is a leader among Chinese coal-fired independent power producers, or IPPs, in terms of installed capacity, production, and revenue. At the end of 2017, the company owned and operated power plants with total attributable capacity of 92 gigawatts, making it one of China’s largest independent power producers. Coal-fired generation accounted for more than 90% of total power output. However, the power price is set by the government and is subject to regular reviews, whil...
- Jennifer Song
Falling Coal Price Will Be a Key Growth Driver for Huaneng in 2019
No-moat Huaneng’s net loss of CNY 140 million in the third quarter was a negative surprise, which should be largely attributable to a CNY 174 million impairment at Singapore Tuas, as well as a CNY 359 million foreign exchange loss from its investment in the Pakistan project. Core operation also missed slightly on higher-than-expected fuel cost, despite a decent 8% growth in power output and marginally improved power price. This indicates that coal-fired IPPs have little bargaining power over c...
- Jennifer Song
Morningstar | Huaneng Posts a Disappointing 3Q; FVE Lowered to HKD 5.6...
No-moat Huaneng’s net loss of CNY 140 million in the third quarter was a negative surprise, which should be largely attributable to a CNY 174 million impairment at Singapore Tuas, as well as a CNY 359 million foreign exchange loss from its investment in the Pakistan project. Core operation also missed slightly on higher-than-expected fuel cost, despite a decent 8% growth in power output and marginally improved power price. This indicates that coal-fired IPPs have little bargaining power over c...
- Jennifer Song
Morningstar | Huaneng Posts a Disappointing 3Q; FVE Lowered to HKD 5.6...
No-moat Huaneng’s net loss of CNY 140 million in the third quarter was a negative surprise, which should be largely attributable to a CNY 174 million impairment at Singapore Tuas, as well as a CNY 359 million foreign exchange loss from its investment in the Pakistan project. Core operation also missed slightly on higher-than-expected fuel cost, despite a decent 8% growth in power output and marginally improved power price. This indicates that coal-fired IPPs have little bargaining power over c...
- Jennifer Song
Huaneng Posts a Disappointing 3Q; FVE Lowered to HKD 5.60 on Near-Term...
No-moat Huaneng’s net loss of CNY 140 million in the third quarter was a negative surprise, which should be largely attributable to a CNY 174 million impairment at Singapore Tuas, as well as a CNY 359 million foreign exchange loss from its investment in the Pakistan project. Core operation also missed slightly on higher-than-expected fuel cost, despite a decent 8% growth in power output and marginally improved power price. This indicates that coal-fired IPPs have little bargaining power over c...
- Jennifer Song
Morningstar | Strong Power Demand and Tariff Hike Boosted Huaneng’s ...
No-moat Huaneng’s strong first-half 2018 result, with net profit rising 6 times year over year to CNY 1.7 billion, was within expectations, with 12% growth in power sales volume and a 2.7% increase in average selling tariff the key boosts. While Huaneng’s unit coal cost was up by 6% in first-half 2018, the recent decline in the QHD 5,500 Kcal spot coal price to around CNY 600/ton from over CNY 700/ton in early June reaffirms our bearish coal price outlook, and we expect coal price weakness t...
- Jennifer Song
Morningstar | Strong Power Demand and Tariff Hike Boosted Huaneng’s ...
No-moat Huaneng’s strong first-half 2018 result, with net profit rising 6 times year over year to CNY 1.7 billion, was within expectations, with 12% growth in power sales volume and a 2.7% increase in average selling tariff the key boosts. While Huaneng’s unit coal cost was up by 6% in first-half 2018, the recent decline in the QHD 5,500 Kcal spot coal price to around CNY 600/ton from over CNY 700/ton in early June reaffirms our bearish coal price outlook, and we expect coal price weakness t...
- Jennifer Song
Strong Power Demand and Tariff Hike Boosted Huaneng’s First Half; Sh...
No-moat Huaneng’s strong first-half 2018 result, with net profit rising 6 times year over year to CNY 1.7 billion, was within expectations, with 12% growth in power sales volume and a 2.7% increase in average selling tariff the key boosts. While Huaneng’s unit coal cost was up by 6% in first-half 2018, the recent decline in the QHD 5,500 Kcal spot coal price to around CNY 600/ton from over CNY 700/ton in early June reaffirms our bearish coal price outlook, and we expect coal price weakness t...
- Jennifer Song
Coal-fired IPPs See Both Opportunities and Challenges from Reforms; Sh...
Our recent visits with major coal and power companies revealed both opportunities and challenges for Chinese coal-fired independent power producers, or IPPs, amid the sector's reform. We expect coal-fired power plants to benefit from stable margins and healthy cash flows in long-run, with reforms likely to allow the IPPs to better match fuel costs with power pricing. However, the sector's long-standing and deep-seated structural problems, along with the complexities and difficulties in balancing...
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