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<Research>Citi Expects Coal Prices to Decline, Lifts HUANENG POWER (00902.HK) TP to $6.2, Reiterates Rating at Buy
Recommend 5 Positive 8 Negative 3 |
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HUANENG POWER (00902.HK)'s 1H25 results beat expectations, with net profit rising 23.2% YoY to RMB9.578 billion, surpassing both expectations of the market and Citi Research, Citi Research issued a research report saying. During the period, unit coal costs fell by 10.1% YoY. The broker forecasted spot coal prices to decline further over the next 12-18 months due to weakening demand, which should be more than enough to offset the price support from supply-side reforms in the coal industry. Also, the Company's free cash flow improved, and its dividend yield is expected to increase. Therefore, Citi Research reiterated rating at Buy for HUANENG POWER. Based on the reduction in coal costs, the broker raised its 2025-2027 net profit forecasts by 19-23%, and lifted its target prices for HUANENG POWER's H-/ A-shares by 15%/ 14% to $6.2/ RMB8.8. Its current dividend yields are 7.8% and 5.1% each, which are attractive. AASTOCKS Financial News Website: www.aastocks.com |
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