Zhi Tong Cai Jing·2026-01-19 08:52Core Viewpoint - Citigroup has downgraded the ratings of Huaneng International Power's H-shares (00902) and A-shares (600011.SH) from "Buy" to "Sell" due to expectations of declining net profits starting in 2026, driven by larger-than-expected electricity price reductions and limited room for coal cost decreases [1] Group 1: Rating Changes and Price Targets - Huaneng's target price for H-shares has been reduced from HKD 7.2 to HKD 4.5, while the target price for A-shares has been lowered from RMB 10 to RMB 6.25 [1] - The expected return on equity for Huaneng in 2025 is projected at 9.8%, the highest level since 2015, but it may face downward risks [1] Group 2: Profit Forecast Adjustments - Citigroup has revised its net profit forecasts for Huaneng for 2025 to 2027 down by 7%, 46%, and 71% respectively [1] - The estimated net profit for Huaneng in 2023 is projected to be RMB 7.17 billion, representing a year-on-year decline of 38%, with a further estimated drop to RMB 3.979 billion in 2027, a decrease of 44.5% year-on-year [1] Group 3: Dividend Yield Expectations - The expected dividend yield for Huaneng's H-shares in 2026 is 4.9%, while for A-shares it is 3.6%, which are considered not high [1]