Beijing Datang Power Generation Co will step up power project investment this year to offset lower interest income, which helped bolster its net profit growth last year.
Vice-chairman Yang Ji said Datang earned 160 million yuan (about HK$148.8 million) in interest income from cash holdings of 3.382 billion yuan, and an exceptional gain of 19 million yuan in interest income from the frozen over-subscription fund during its initial public offering in March.
'With so much cash on hand, the company is very healthy. But if we cannot invest the money, our efficiency is low. Now we want to enhance efficiency by enlarging investment.' He said Datang would take advantage of priority development rights granted by its parent - - North China Power Group Co - - to buy new power projects. It would also increase ownership in other projects.
In December, Datang raised its stake in Zhangjiakou power plant phase two to 100 per cent from 55 per cent.
Chief economist Yang Hongming said the company had applied for an increase in on-grid tariffs this year to achieve the allowed rate of return of 15 per cent.
Last year, it secured a 6.5 per cent rise in on-grid tariffs to 0.328 yuan per kilowatt hour, including value added tax, after rises of 21 per cent at the end of 1986.
