Beijing Datang Power Generation develops, builds and operates coal-fired electric power plants. Last year, Salomon Smith Barney put a neutral-high risk rating on the stock, saying there was little scope for power tariff increases to boost revenue. Under a neutral-high risk rating the stock was expected to trade in a range of 10 per cent either side of the overall stock market. The stock performed much worse than forecast, underperforming the market by a large margin. Beijing Datang brought negative returns of more than 30 per cent while the Hang Seng Index saw positive returns of more than 30 per cent over the year. The brokerage warned the company would face growing depreciation, capital expenditure and financing costs for new capacity. Salomon also voiced concerns last year that there could be delays in the company's planned expansion as a key project had not been officially transferred from its parent company, North China Power, while the financing of the project depended on the company obtaining a World Bank loan in US dollars. Salomon said that although the earnings outlook for the company was poor it expected the stock to benefit from its lower risk profile. Beijing Datang's profit rose 6 per cent last year to 1.21 billion yuan (about $1.12 billion) for the 12 months to December 31. Stephen Seawright