Huaneng Power International (HUNGF) AI Stock Analysis

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Positive Factors

Earnings

Analyst recommends upgrading to BUY due to defensive earnings amid tariff war.

Fuel Costs

Fuel cost is expected to decline 7.5%, supported by falling coal prices.

Renewable Energy Expansion

Huaneng Power is expanding its renewable energy exposure by adding around 40GW of clean power capacity during the period of the 14th Five-Year Plan.

Negative Factors

Electricity Tariff

Downward pressure in electricity tariff, climbing curtailment rate, and higher coal prices are negative for earnings growth.

Financial Risk

High financial risk from the company’s stretched balance sheet, with an almost 400% net debt-equity ratio, which is the highest amongst its peers.

Power Generation

Expect the lowest growth in power generation in FY25 due to declining utilisation hours at coal-fired units.

Huaneng Power International (HUNGF) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$14.19B

Dividend Yield4.45%

Average Volume (3M)3.20K

Price to Earnings (P/E)9.5

Beta (1Y)0.14

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees56,263

SectorUtilities

Sector Strength77

IndustryIndependent Power Producers

Share Statistics

EPS (TTM)0.07

Shares Outstanding4,700,383,300

10 Day Avg. Volume1,824

30 Day Avg. Volume3,201

Financial Highlights & Ratios

PEG Ratio-1.26

Price to Book (P/B)0.59

Price to Sales (P/S)0.00

P/FCF Ratio-13.55

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$0.64

Price Target Upside1.59% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Huaneng Power International Business Overview & Revenue Model

Company DescriptionHuaneng Power International, Inc., together with its subsidiaries, engages in the generation and sale of electric power to the regional or provincial grid companies in the People's Republic of China and internationally. It is involved in the development, construction, operation, and management of power plants and related projects. The company also generates power from gas turbine, hydro, wind, photovoltaic, coal-fired, and biomass resources. In addition, it is involved in the sale of coal ash and lime; cargo loading and storage; port, warehousing, and conveying activities; photovoltaic power generation projects development and construction; and provision of thermal energy and cold energy services, as well as thermal heating services. Further, the company engages in the repair and maintenance of power equipment; supply of steam and hot water; plumbing pipe installation and repair; and energy engineering construction activities. Additionally, it is involved in the provision of transportation services; construction and operation of electricity distribution networks and heating pipe networks; energy supply, energy transmission, and substation project contracting activities; cargo handling and transportation; and port management, investment, and development activities. The company engages in the management of industrial water and waste, as well as provides environment engineering, and information technology and management consulting services. It also sells raw and processed coal; and offers central heat and desalinated water services. As of December 31, 2021, the company had a controlled generating capacity of 118,695 megawatts and an equity-based installed capacity of 103,875 megawatts. Huaneng Power International, Inc. was incorporated in 1994 and is based in Beijing, the People's Republic of China.

How the Company Makes Money

Huaneng Power International Earnings Call Summary

Earnings Call Date:Apr 29, 2025

(Q3-2024)

% Change Since: 8.62%|

Next Earnings Date:Jul 29, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mix of positive and negative developments. While there was notable progress in renewable energy capacity and net profit growth, the company faced challenges with declining revenues, tariff reductions, and asset impairments. Overseas operations, particularly in Singapore, also showed a decrease in profitability.

Q3-2024 Updates

Positive Updates

Net Profit Increase

Net profit attributable to the parent after deducting nonrecurring profit and losses was CNY 10.028 billion, increasing by CNY 633 million or 6.73%.

Growth in Renewable Capacity

The company added 5,278.6 megawatts of new units, including 1,467.5 megawatts of wind power and 3,753.1 megawatts of solar power.

Improved Coal Cost Management

The unified cost of coal decreased by 8.74% year-on-year.

Record Performance in Pakistan

The Sahiwal power plant in Pakistan reached a record high with a profit before tax of CNY 670 million, increasing by CNY 241 million.

Negative Updates

Decrease in Operating Revenue

The company achieved a consolidated operating revenue of JPY 184.396 billion in the first three quarters, decreasing by 3.62%.

Tariff Decline

The average tariff decreased by 2.63% to CNY 496.27 per megawatt hour.

Overseas Profit Decline

Profit before tax of Tuas Power decreased by CNY 1.394 billion.

Asset Impairment

Asset impairment for Jiangjin power plant amounted to CNY 727 million, and for non and biomass, the impairment was about CNY 409 million.

Company Guidance

During the third quarter earnings call for Huaneng Power International, several key metrics and guidance were discussed. The company reported a consolidated operating revenue of JPY 184.396 billion, showing a 3.62% decrease compared to the previous year. Net profit attributable to shareholders was CNY 10.41 billion, with earnings per share at JPY 0.53. The company saw a 1.14% increase in domestic on-grid power sales, reaching 341.24 billion kilowatt hours, despite a 2.63% decrease in average tariff to CNY 496.27 per megawatt hour. The unified cost for coal decreased by 8.74% to CNY 303.47 per megawatt hour. Key developments included the addition of 5,278.6 megawatts in new units, with 1,467.5 in wind power and 3,753.1 in solar power. The foreign operations faced challenges with a profit before tax in Singapore's Tuas Power dropping by CNY 1.394 billion. The company projects improvements in coal supply and demand balance for 2025, with expectations of stable coal consumption and a slight increase in coal supply. Additionally, the company incurred a CNY 727 million asset impairment for Jiangjin power plant, with future impairments being evaluated based on ongoing assessments.

Huaneng Power International Financial Statement Overview

Summary

Huaneng Power International demonstrates solid profitability with strong gross and improving net profit margins. The company shows operational efficiency with positive EBIT and EBITDA margins. However, negative revenue growth and high leverage reflected in the balance sheet pose risks. The cash flow statement indicates strong cash generation relative to profits, but negative free cash flow suggests liquidity constraints.

Income Statement

Positive

Huaneng Power International shows a solid performance in terms of profitability with a strong gross profit margin of 15.14% and an improving net profit margin of 4.13% in 2024. Revenue growth was slightly negative in 2024 at -3.47%, reflecting potential market challenges. However, EBIT and EBITDA margins of 7.63% and 21.06% respectively indicate improving operational efficiency over the year.

Balance Sheet

Positive

The company's balance sheet reflects a high debt-to-equity ratio of 1.87, indicating significant leverage which could pose a risk in volatile markets. However, return on equity improved to 7.38% in 2024, up from 16.08% in 2023, showcasing enhanced profitability. The equity ratio stands at 23.42%, demonstrating a reasonable portion of assets financed by equity.

Cash Flow

Neutral

Operating cash flow to net income ratio of 4.99 suggests strong cash generation relative to profits. However, the free cash flow to net income ratio is negative, indicating cash outflows exceeding income, highlighting potential liquidity constraints. The free cash flow growth rate was negative, indicating ongoing capital expenditures exceed cash inflows.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
240.11B	245.55B	254.40B	246.72B	204.61B	169.44B
	Gross Profit
37.53B	37.19B	30.78B	7.50B	41.77B	29.56B
	EBIT
21.21B	18.74B	13.25B	2.86B	-6.61B	24.28B
	EBITDA
32.21B	51.71B	47.04B	24.13B	16.44B	39.32B
	Net Income Common Stockholders
10.51B	10.14B	8.45B	-10.08B	-13.19B	4.56B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
24.02B	19.93B	16.85B	17.18B	16.35B	13.87B
	Total Assets
588.49B	586.84B	541.16B	502.61B	500.77B	438.21B
	Total Debt
260.85B	256.93B	253.78B	300.51B	297.70B	236.77B
	Net Debt
236.84B	236.99B	236.93B	283.34B	281.35B	222.90B
	Total Liabilities
378.58B	383.79B	369.80B	376.06B	367.21B	296.73B
	Stockholders Equity
141.85B	137.41B	52.51B	108.54B	113.05B	121.70B
Cash Flow		Free Cash Flow
-7.42B	-13.12B	-13.88B	-8.21B	-37.45B	-617.57M
	Operating Cash Flow
31.31B	50.53B	45.50B	32.52B	6.03B	42.05B
	Investing Cash Flow
-63.61B	-63.60B	-55.23B	-39.97B	-42.66B	-42.07B
	Financing Cash Flow
9.65B	15.48B	9.42B	7.97B	39.77B	1.52B

Huaneng Power International Risk Analysis

Huaneng Power International disclosed 26 risk factors in its most recent earnings report. Huaneng Power International reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Huaneng Power International Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HUNGF		$14.19B	9.52	7.63%	4.45%	―	―
Sector *	64 Neutral	$8.54B	10.30	4.24%	4.37%	4.14%	-13.04%
DAT		£5.22B	7.71	17.92%	<0.01%	―	―
CGNWF		$23.76B	224.18	8.56%	―	―	―
CPWIF		$5.15B	10.97	8.59%	4.49%	―	―
CRPJF		$14.06B	6.13	15.59%	5.72%	―	―
HPIFF		$7.91B	7.43	13.59%	5.56%	―	―

* Utilities Sector Average

Performance Comparison

HUNGF

Huaneng Power International

0.63

-0.05

-7.35%

GB:DAT

Datang International Power Generation Co

24.52

0.00

0.00%

CGNWF

CGN Power Co

6.28

0.00

0.00%

CPWIF

China Power International Development

0.41

-0.09

-18.00%

CRPJF

China Resources Power Holdings Co

2.33

-0.77

-24.84%

HPIFF

Huadian Power International

0.58

-0.08

-12.12%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.