H share Shandong International Power Development (SIPD) - the province's largest power producer - posted a better than expected 2.3 per cent year-on-year interim net profit growth, but analysts warned the company faces tough market conditions in the next two years.
The company, which commands a 22 per cent market share in Shandong, reported a net profit of 670.57 million yuan (HK$631.95 million), up from 655.49 million yuan in the same period last year.
It was 5.36 per cent ahead of the 636.4 million yuan average of estimates of six brokerage analysts polled in a survey, which ranged from 600 million yuan to 670 million yuan.
Excluding exceptional items, net profit would have grown 24.29 per cent.
Last year's first-half net profit included a one-time 116 million yuan gain from early repayment of a US$209 million loan granted by the World Bank.
It earlier reported 7.74 per cent power output growth to 14.66 billion kilowatt-hours (kWh).
UBS regional utilities analyst Alice Hui Suk-fong estimated that SIPD would record a 1.1 per cent fall in average tariff to 0.289 yuan per kWh, due to the lower rate of newly commissioned power generators such as unit 4 of the Laicheng plant, which has a tariff of 0.265 yuan.
