Securities Promotion: Huaneng is expected to lose profit this year

Guo Hao Capital Huaneng International (0902) announced the first half of the domestic electricity generation total 86.1 Billion-kilowatt, equivalent to the annual target of 45.3%, declining by 5.84% per year. 　　In Singapore, energy generation declined by 6.3% to 4.72 billion kwh per year. Power growth will accelerate in the second half of the year and a year-on-year decline of 9.3% in the 1th quarter, the bank believes that China's energy consumption in the 2nd quarter due to the continuous increase in electricity demand has improved. 　　China's demand for electricity has returned to growth in June, mainly due to lower base levels in the second half of last year, and the bank believes it will accelerate in 09. In 09, China was committed to turning deficit into surplus, with installed capacity of 9% or 3,712 MW. After a 3 consecutive quarterly loss, the company finally returned to profitability in the 1th quarter of 09 under Chinese accounting standards. 　　The bank is firmly convinced that in the context of an increase in electricity prices, interest rates and lower coal prices, the company will recover 09 earnings. Electricity price controlled affects profitability taking into account global inflation concerns and downstream demand, the bank expects higher coal prices in the second half. Power companies ' profitability is more sensitive to coal prices than electricity generation. 　　The bank is worried that the profitability of Huaneng will be again under pressure because of the control of electricity prices. 　　The bank temporarily maintained 09, 10 earnings forecast of 3.025 billion yuan and 3.751 billion yuan, earnings per share of 0.25 yuan and 0.31 yuan, corresponding to 09, 10, the P/E ratio is 18.2 times times and 14.7 times times. The company 09 market rate is 1.4 times times, the valuation is reasonable. Maintain a rating of 12-month target price of 5.6 yuan (current 5.14 yuan), equivalent to 09 1.5 times times the market rate.