HPI(SH:600011) Hua Yuan Zheng Quan·2024-04-26 02:30Investment Rating - The report assigns an "Accumulate" rating for Huaneng International, marking its first coverage [4][7]. Core Viewpoints - Huaneng International is the flagship listed platform of Huaneng Group and the largest listed power generation company in China, with a total installed capacity of 136 million kilowatts as of December 2023, including 93.28 million kilowatts of coal power and 28.61 million kilowatts of renewable energy [4][12]. - The company has a strong performance recovery in 2023, achieving a net profit attributable to shareholders of 8.446 billion yuan, compared to a loss of 3.942 billion yuan in the same period last year [4][26]. - The introduction of a capacity price mechanism for coal power is expected to significantly benefit the company, with potential annual compensation of 10 billion yuan for its coal power capacity [4][26]. Summary by Sections 1. Huaneng Group Flagship Platform - The Largest Power Generation Company - Huaneng International is the largest listed power generation company in China, with a diversified energy portfolio including coal, gas, wind, and solar power [4][12]. - As of December 2023, the company has achieved a total renewable energy installed capacity of 28.61 million kilowatts, with a target of adding 40 million kilowatts during the 14th Five-Year Plan [4][12]. 2. Capacity Price Mechanism and Long-term Opportunities - The capacity price mechanism introduced by the National Energy Administration in November 2023 is expected to transform the commercial model of coal power, allowing for a more stable revenue stream [4][26]. - The report highlights that the focus of market dynamics is shifting back to coal prices, with a potential increase in net profit of 8.5 billion yuan for every 100 yuan per ton decrease in coal prices [4][26]. 3. Profit Forecast and Valuation - The forecasted net profits for Huaneng International for 2024, 2025, and 2026 are 12.735 billion yuan, 14.569 billion yuan, and 15.721 billion yuan respectively, with a corresponding PE ratio of 16, 13, and 12 [6][30]. - The report emphasizes that the company is well-positioned to benefit from the restructuring of the coal power mechanism, justifying the "Accumulate" rating [4][7].