Shareholders might have noticed that Huaneng Power International, Inc. (HKG:902) filed its full-year result this time last week. The early response was not positive, with shares down 2.6% to HK$4.47 in the past week. Statutory earnings per share fell badly short of expectations, coming in at CN¥0.46, some 23% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at CN¥246b. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following last week's earnings report, Huaneng Power International's nine analysts are forecasting 2025 revenues to be CN¥241.4b, approximately in line with the last 12 months. Statutory earnings per share are predicted to soar 41% to CN¥0.65. In the lead-up to this report, the analysts had been modelling revenues of CN¥245.9b and earnings per share (EPS) of CN¥0.67 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
See our latest analysis for Huaneng Power International
The consensus price target held steady at HK$5.06, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Huaneng Power International, with the most bullish analyst valuing it at HK$5.50 and the most bearish at HK$4.37 per share. This is a very narrow spread of estimates, implying either that Huaneng Power International is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 1.7% annualised decline to the end of 2025. That is a notable change from historical growth of 9.8% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Huaneng Power International is expected to lag the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Huaneng Power International. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Huaneng Power International's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Huaneng Power International going out to 2027, and you can see them free on our platform here..
Before you take the next step you should know about the 2 warning signs for Huaneng Power International (1 can't be ignored!) that we have uncovered.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.