[ET Net News Agency, 25 October 2018] Deutsche Bank said Huaneng Power (HNP)(00902)
reported weak 3Q results with a net loss of Rmb140mn, which is unexpected as the 8% yoy
output growth and 1% yoy higher tariffs were not enough to offset the rising costs.
Earnings are mainly dragged by a 11% yoy increase in cost of operations (DB estimated a
7% yoy higher unit fuel cost in 3Q), 12% yoy higher financial cost, and Rmb229mn loss in
investment income.
Going into 4Q, DB sees increasing fuel cost pressure as the QHD coal prices are still on
the rise. It thinks Huaneng is trading at unattractive 2019 valuations (0.7x P/B) and the
slower-than-expected earnings recovery is also a negative on the dividend outlook.
DB maintained its "hold" call on Huaneng, with a target price of HK$5.7. (KL)
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00902 HUANENG POWER
Nominal 
4.410 +0.150 (+3.521%) Others
25/10/2018 18:01
[I-bank focus]DB sees increasing fuel cost pressure for HNP
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