WHAT THE BROKER SAID

About a year ago China International Capital Corp (CICC) maintained its 'hold' recommendation on Huaneng International Power after China's biggest independent power producer said its generation volume in 2004 increased 26 per cent over 2003. It generated 114.3 billion KWh in 2004.

Earnings for last year could beat CICC's expectations. Tariff reshuffles could contribute a net profit of 150 million to 200 million yuan. Huaneng Power said fuel price inflation for the quarter was largely on a par with the third quarter, leading CICC to believe net profit for 2004 might be flat with 2003, up 5 per cent from the broker's existing forecast.

Last March Huaneng reported a 1.96 per cent decline in earning for 2004 due to rising coal costs, even though higher power output and higher tariffs increased revenue. Net profit fell to 5.32 billion yuan in 2004 from 5.43 billion yuan in 2003.

The counter closed on Friday at $5.30.