Huadian Power International, a mainland electricity producer listed in Hong Kong and Shanghai, posted third-quarter net profit that was little changed from a year ago as its increased capacity was underutilised. Net profit was 347 million yuan, up 0.65 per cent from 345 million yuan a year earlier, based on Chinese accounting standards, the Shandong firm said in a statement to the Shanghai Stock Exchange. Turnover rose 11.6 per cent to 3.92 billion yuan. Huadian produced 9.65 per cent more electricity in the first three quarters this year than in the same period last year at 38.44 million megawatt-hours, driven by contributions from new plants including units in Qingdao and Zhangqiu. The average utilisation hours in the period fell 3.9 per cent due to more capacity in its operating areas. Huadian plans to double its capacity to 20,777 MW by the end of next year from 10,967 MW at the end of June and is diversifying out of Shandong province into areas with lower coal costs and higher utilisation such as Sichuan, Ningxia and Anhui provinces. CLSA said Huadian will benefit from declining coal prices. For every 1 per cent drop in coal prices, its profit will rise 6 per cent, the investment bank said in a report. Huadian's electricity generation growth will also outpace declines in the utilisation rate, helping operating margin improve to 17.6 per cent in 2008 from about 14 per cent this year, it said. For the nine months to September, net profit grew 7 per cent to 855 million yuan, compared with a 13 per cent estimate by BOC International. Turnover rose 11.3 per cent to 11.03 billion yuan. Separately, Huadian said it has agreed to pay 90.78 million yuan to increase its stake in subsidiary Huadian Tengzhou Xinynan Power to 88.163 per cent from 54.49 per cent.