[True Insight Institutional View] Huaneng Power International (00902.HK): First-half performance exceeds expectations

Huaneng Power International (00902.HK) delivered robust financial performance in the first half of 2025, exceeding market expectations. The company's net profit reached approximately RMB 9.578 billion, a year-on-year increase of over 23%, demonstrating significant cost control effectiveness, with fuel costs decreasing by more than 14.4%, offsetting the adverse effects of declining power generation and electricity prices.

Huaneng's coal procurement structure is diversified, with long-term contracts, spot market purchases, and imported coal accounting for approximately 49%, 18%, and 33%, respectively. The long-term coal price is expected to decline due to reduced demand, leaving room for further cost reductions in the future.

Renewable energy is a highlight of Huaneng's capacity growth, with nearly 8,000 megawatts of new capacity added in the first half of 2025, a year-on-year increase of over 1.6 times. More than half of this was solar power, while wind and thermal power accounted for approximately 24% and 22%, respectively, reflecting the company's active transition to clean energy. The target of adding 10GW of new renewable energy capacity in 2025 is highly achievable.

Looking ahead to the second half of the year, Huaneng will accelerate renewable energy projects and optimize its power generation structure to cope with declining market electricity prices and the pressure of renewable energy integration, while continuing to strengthen cost management and market competitiveness.

Source: KGI Securities