Core Viewpoint - Citigroup has raised the target price for Huaneng International Power (600011) by 14.8%, from HKD 5.4 to HKD 6.2, and increased the target price for its A-shares (600011.SH) by 14% to RMB 8.8, maintaining a "Buy" rating [1] Group 1 - Huaneng International's earnings for the first half of 2025 and the second quarter exceeded preliminary results, primarily benefiting from lower-than-expected coal costs [1] - Citigroup anticipates that spot coal prices will decline further in the next 12-18 months due to decreased demand, which will offset potential gains from supply-side reforms in the coal industry [1] - The company is expected to increase its dividend payout ratio due to growth in free cash flow [1] Group 2 - The forecast for Huaneng International's net profit from 2025 to 2027 has been raised by 19-23% due to the decrease in coal costs [1] - The H-shares dividend yield is projected at 7.8%, while the A-shares dividend yield is estimated at 5.1%, which is considered attractive [1]

Core Viewpoint - Citigroup has raised the target price for Huaneng International Power Co., Ltd. by 14.8% from HKD 5.4 to HKD 6.2 and increased the target price for its A-shares by 14% to RMB 8.8, maintaining a "Buy" rating [1] Group 1: Financial Performance - Huaneng International's earnings for the first half of 2025 and the second quarter are better than initial estimates, primarily benefiting from lower-than-expected coal costs [1] - The company is expected to see a further decline in spot coal prices over the next 12-18 months due to decreased demand, which is sufficient to offset potential gains from supply-side reforms in the coal industry [1] Group 2: Cash Flow and Dividends - The increase in free cash flow allows the company to raise its dividend payout ratio [1] - With the decline in coal costs, the profit forecast for the company from 2025 to 2027 is projected to grow by 19-23% [1] - The H-shares offer an attractive dividend yield of 7.8%, while the A-shares provide a yield of 5.1% [1]