HUANENG POWER Slumps Nearly 7% to One-year Low as BofAS and Daiwa Say 2Q Net Profit Misses Forecasts; Reiterate 'Underperform' Rating

HUANENG POWER (00902.HK) -0.375 (-6.591%) Short selling $47.50M; Ratio 47.538% opened 4.31% lower in a gap-down today (19th), breaking below the support at the early-Jul trough. The stock once slumped 9.1% to a one-year low of HKD5.17. It is now trading at HKD5.3, down 6.85%, with turnover of 71.7216 million shares, involving HKD379 million.

BofAS said in a report that HUANENG POWER (00902.HK) -0.375 (-6.591%) Short selling $47.50M; Ratio 47.538% 's 2Q net profit fell 51% YoY to RMB2.102 billion, below the broker's forecast of RMB2.5 billion and also lower than market expectations. Excluding one-off items such as asset impairment losses, which narrowed sharply to RMB400,000 in 2Q from RMB269 million in 2Q last year, core earnings were estimated to have declined even more sharply by 55%.

The report said the weaker-than-expected 2Q results were mainly due to: 1) a 9% YoY increase in net interest expenses caused by higher debt levels; 2) Singapore Tuas operations being affected by higher carbon taxes and the expiry of high-margin retail contracts, leading to a 45% YoY decline in pre-tax profit to RMB745 million; 3) a 18% YoY drop in wind power pre-tax profit to RMB1.4 billion; and 4) increases in the effective tax rate to 25% (vs. 18% in 2Q last year) and the minority interest ratio to 25% (vs. 20% in 2Q last year). BofAS expected earnings pressure to persist in 3Q, as spot coal prices rose 24% YoY during the period while electricity tariffs in most provinces remained under pressure. The broker maintained its Underperform rating on both H shares and A shares, with a TP of HKD5 for the H shares and RMB6.3 for HUANENG INT'L (600011.SH) -0.170 (-2.467%) A shares, based on a forecast PB ratio of 0.95x, corresponding to an estimated 2027 return on equity of about 7.5%.

Daiwa said in a report that HUANENG POWER (00902.HK) -0.375 (-6.591%) Short selling $47.50M; Ratio 47.538% 's recurring net profit attributable to shareholders in 2Q fell 54.7% YoY to RMB1.817 billion, while reported net profit declined 51% YoY to RMB2.102 billion. Profit from the coal-fired power segment dropped 52% YoY to RMB1.584 billion, with unit profit decreasing from RMB0.044 per kWh in 2Q last year to RMB0.021 per kWh. Wind power and photovoltaic profits also fell 18% and 21% YoY respectively. Daiwa said the results supported its view that earnings had already peaked in 2025, as pressure on electricity tariffs is increasingly offsetting the benefits from lower coal prices. It reiterated its Underperform rating with a 12-month TP of HKD5.2.(ad/da)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-08-18 16:25.) (A Shares quote is delayed for at least 15 mins.)