Ge Long Hui·2025-09-26 04:27Core Viewpoint - Morgan Stanley has turned cautious on Huaneng International Power, citing a 29% increase in the stock this year, outperforming peers whose performance remained flat year-on-year, indicating that the stock may have already priced in its fundamentals [1] Group 1: Financial Performance - The significant rise in Huaneng's stock is attributed to strong expectations for its coal-fired power business, but the bank sees limited room for further profit margin expansion due to rising coal prices, which have increased over 10% from their June lows [1] - The uncertainty surrounding electricity prices for the next year adds to the cautious outlook [1] Group 2: Dividend and Investment Outlook - There is uncertainty regarding dividend growth, as renewable energy investments may remain high during the 14th Five-Year Plan period, with last year's dividend payout ratio of 58% exceeding the company's commitment of 50% [1] - The combination of bottoming coal prices and long-term uncertainty in coal-fired power profitability makes the risk-reward profile less attractive [1] Group 3: Earnings Forecast and Rating Change - The bank has lowered its earnings forecasts for the company for the next year and the year after by 6% to 7% [1] - The target price remains at HKD 4.85, and the investment rating has been downgraded from "Overweight" to "Underweight" [1]