Huaneng Power International, under the helm of Li Xiaopeng , son of Chinese premier Li Peng , earned net profit of 1.2 billion yuan (about HK$1.1 billion) last year, an increase of 45 per cent on the previous year. The figure came at the low end of market forecasts and compares with Merrill Lynch's projection of 1.24 billion yuan. Total generation by Huaneng's five power plants was 16.56 billion kilowatt hours, 2.8 per cent below actual generation in 1994. The company said this was due to decreased excess generation at its Fuzhou Power Plant last year as a result of abundant rain which had increased the availability of hydro power in the area. In 1994, excess generation at the Fuzhou plant was high because of the low availability of hydro power in Fujian province. Huaneng, one of the two Chinese enterprises with a primary listing in New York, said it achieved a rate of return on equity-financed net fixed assets slightly higher than expected, including construction work in progress. It did not specify what the rate was, but according to the company's listing prospectus in 1994, Huaneng was expected to return 11 per cent for last year and 15 per cent in 1998. Another New York-listed Chinese power company, Shandong Huaneng Power Development, achieved a 16.37 per cent rate of return on average net fixed asset last year. In order to entice foreign interests in the overseas-listed Chinese power companies, Beijing has guaranteed their rate of return at 15 per cent on fixed assets for tariffs increase. Huaneng operates in five provinces and has an installed capacity of 2,900 MW, while Shandong Huaneng is restricted to Shandong province. Huaneng said it expected that two units of Phase 1 of its Shantou coal-fired power plant, and the Shangan Phase 2 expansion would be in operation next year. It said equipment supply contracts for its Dalian Phase 2 expansion and the Dandong power plant were signed in June, last year. Construction work on the Dalian Phase 2 project had begun this month, while letters of award for equipment for both Fuzhou Phase 2 expansion and Nantong Phase 2 expansion had been signed at the end of last year, it said. The Jinling plant was awaiting project approval from the State Planning Commission.