China Power International Development shares fall despite 15pc profit gain
Shares of China Power International Development fell 2.5 per cent after the company posted a 15.48 per cent year-on-year rise in net profit to 1.62 billion yuan (HK$2.04 billion) for the first six months of the year.
The stock was trading as low as HK$3.16 on Friday morning.
The Hong Kong-listed unit of one of the Big Five state-owned power generators, China Power Investment Corp, said in a filing to the stock exchange on Thursday night that the profit rise was due to higher power volume sold, higher hydro-power selling prices and the start-up of a new generating unit. Gains were constrained by higher depreciation, finance and staff costs.
The first-half profit amounts to 50.9 per cent of the 2.53 billion yuan full-year average net profit estimate of 16 analysts polled by Thomson Reuters.
Revenue grew 12.7 per cent to 10.86 billion yuan. After-tax profit from coal-fired power jumped 79.2 per cent to 1.5 billion yuan on the back of a 14.7 per cent fall in coal cost per unit of output, while that of hydro power halved to 610.6 million yuan due to a decline in rainfall.
First-half utilisation of its hydro plants measured by hours dropped 18.4 per cent, compared with a 2.8 per cent fall at its coal-fired units.
Total power output grew 15.5 per cent as its total installed generation capacity increased 15.6 per cent. The company’s average hydro-power selling price rose 1.8 per cent while that of coal-fired power fell 2.8 per cent.
China Power expects coal prices to stay low in the second half of the year, but cautioned that the “coal-fired power business will still be facing the pressures on environmental protection commitment and financing in general, and competition in the power generation market in certain provinces remain keen”.