Bank of America Securities issued a research report stating that HUANENG POWER (00902) will achieve a dividend yield of 8.3% in 2025 while maintaining a 58% payout ratio, representing the highest yield among peer companies under the firm's coverage, with the company's free cash flow showing significant improvement.
The firm reiterated its "Buy" rating, expecting continued improvement in thermal power profitability in the coming months to drive valuation reassessment. The H-share target price has been raised from HK$5.5 to HK$6.0, while the A-share (600011.SH) target price has been adjusted downward from RMB 9.7 to RMB 8.4 based on AH-share premium adjustments.
Investors are focusing on HUANENG POWER's coal-fired power tariff resilience. Due to better-than-expected performance, the firm has raised its earnings forecasts for HUANENG POWER by 16% for 2025 and 3% for 2026, respectively, reflecting lower interest expenses and other costs, as well as thermal power, wind power, and solar power tariff adjustments in 2026.
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