Huaneng International (600011): Thermal Power Leader Improves Profit and Optimizes Dividend

Huaneng International (600011): Thermal Power Leader Improves Profit and Optimizes Dividend Level

Key Investment Events: The company released a semi-annual report. In H1 in 2019, it realized revenue of 83.4 billion yuan, an increase of 0 in ten years.

9%, net profit attributable to mother 38.

2 ‰, an increase of 79% in ten years, net profit after deduction is 34.

700 million, an annual increase of 79.


The initial gain is zero.

23 yuan, an increase of 0 every year.

10 yuan.

The decline in power generation has dragged down domestic power revenue, and overseas business contributed significantly to revenue.

2019H1 has completed 195.4 billion kilowatt-hours of electricity generation, a decline of 6 per year.

2%, sales of 185 billion kWh, a year-on-year decline of 5.

8% for heating 1.

300 million Gigajoules, an increase of 14 per year.


Affected by the decline in domestic power generation, the company’s domestic power heating business income was 734.

900 million, down 2 previously.

6%; overseas income is 57.

900 million, an increase of 9 in ten years.

2%; port revenue is 0.

900 million (after offsetting between segments), an increase of over 42.

6%; transportation revenue is 0.

700 million (after inter-segment offset), an annual increase of 196.


The apparent return of electricity generation is mainly due to the obvious expansion of clean energy power generation such as 2019H1 hydropower, and the gradual increase in power generation in the thermal power industry has only increased by 0%.

2%, the growth rate dropped significantly; the combined company’s main thermal power plant is located along the coast, policies and demand affect data on power generation, and internal revenues have decreased by 25.

The overall revenue was slightly flat at US $ 900 million, mainly due to the contribution from overseas business: 1) Singapore’s business revenue increased by 800 million; 2) The Pakistan project consolidated operating income in the first half of the year.


The decline in coal costs has extended electricity price growth and promoted profitability improvements.

In the first half of the year, due to the decline in coal prices, the unit fuel cost of thermal power was 223.

8 yuan / MWh, a decrease of 5 per year.

6%, a total of 473 incurred fuel costs.

2 trillion, down 9 from the same period last year.

2%, fuel costs are reduced by 39 per year.

800 million, the company’s operating costs are reduced by 18 every year.

300 million.

In terms of electricity prices, the average on-grid electricity price is 419.

5 yuan / MWh, an increase of 0 in ten years.

2%; market-based transaction power 875.5 billion kWh, the proportion of transactions increased by 10 in ten years.

2pp reached 47%.

The decrease in costs brought by the increase in electricity prices increased its gross profit margin in the first half of the year3.

Three averages reached 16.

4%, cost reduction and slight increase in electricity prices are the top priority for profit growth.

Company period expenses 8.

9% (+0.

5%), better overall cost control.

Net interest rate increased in the first half of the year.

4pp to 5.

8%, ROE increased by 1.

7pp up to 4杭州夜网.

5%, profitability improvement improved reversal.

Dividends are stable and maintained at a high level.

The company’s cash dividends from 2015 to 2017 accounted for 52%, 50% and 88% of the net profit attributable to the parent for that year. The cash dividends for 2018 increased by 3 in total.


According to the company’s commitment, in 2018-2020, in principle, dividends will exceed 70% of distributable profits and sometimes dividends will not be less than 0.

1 yuan, corresponding to a 19-year dividend yield of about 4%, a high proportion of dividends.

Profit forecast and investment advice: EPS are expected to be 0 in 2019-2021.

38 yuan, 0.

45 yuan, 0.

51 yuan, corresponding to PE 18 times, 15 times, 13 times.

The company is a leader in coal-fired power generation. If coal price is to show significant flexibility, it will be given the “overweight” rating for the first time.

Risk warning: coal prices may continue to rise, downstream demand impacts, electricity price fluctuations, cost increases or surpass expectations.