Huaneng Power International's annual net profit increases by over 40%, with three subsidiaries' revenues under pressure | Bond Market Financial Report Observation

Ask AI · How does the divergence in the performance of three subsidiaries reflect the characteristics of regional power markets?

**China Financial News (Cailianshe) March 26, Edited by Zhang Liang, Internship by Wang Shujin）**Huaneng International Power Co., Ltd. (hereinafter referred to as “Huaneng International”) recently released its 2025 annual report. For the full year, the company’s operating revenue was RMB 229.288 billion, down RMB 16.263 billion year on year, a decline of 6.62%. Revenue fell mainly because domestic electricity sales volume and electricity prices both declined year on year.

According to the annual report, the company recorded net profit attributable to shareholders of the parent company of RMB 14.410 billion, up RMB 4.274 billion year on year, an increase of 42.17%. This was mainly driven by lower domestic fuel costs, which boosted profit from thermal power generation.

Huaneng Shandong Power Generation Co., Ltd., Huaneng International Power Jiangsu Energy Development Co., Ltd., and Huaneng (Zhejiang) Energy Development Co., Ltd. are important subsidiaries of Huaneng International, forming key pillars for the company’s business in East China and North China. Huaneng International directly holds 80% equity in Huaneng Shandong, directly holds 100% equity in Huaneng Jiangsu, and directly holds 100% equity in Huaneng Zhejiang.

With Huaneng International’s 2025 annual report disclosed, the operating performance of the three subsidiaries has also come to light. As an important regional layout of Huaneng International in East China and North China, Huaneng Shandong, Huaneng Jiangsu, and Huaneng Zhejiang showed clear performance differentiation in 2025: all three faced pressure from declining revenue, but Huaneng Shandong and Huaneng Jiangsu still achieved growth in net profit.

The core businesses of Huaneng International are investing in, building, and operating power plants, and it generates its main income through the sale of electricity and heat products. As of the end of 2025, Huaneng International’s controllable installed generating capacity reached 155,869 megawatts, with the share of low-carbon and clean energy installed capacity rising to 41.01%. The three subsidiaries above play important roles in ensuring reliable supply of electricity and heat within their respective regions.

In terms of revenue scale, the three subsidiaries all faced revenue pressure to varying degrees in 2025.

Financial reports show that in 2025, Huaneng Shandong achieved operating revenue of RMB 27.957 billion, down 16.88% year on year; Huaneng Jiangsu achieved operating revenue of RMB 21.883 billion, down 10.04% year on year; and Huaneng Zhejiang achieved operating revenue of RMB 14.321 billion, down 10.87% year on year.

On the profit side, the three companies showed a differentiated performance. The financial reports indicate that in 2025, Huaneng Shandong achieved net profit of RMB 1.880 billion, up 11.85% year on year; Huaneng Jiangsu achieved net profit of RMB 2.162 billion, up 1.14% year on year; and Huaneng Zhejiang achieved net profit of RMB 2.012 billion, down 0.37% year on year.

According to data from corporate early warning, Huaneng Zhejiang’s return on net assets (ROE) led the group at 13.09%, while Huaneng Shandong was 6.41% and Huaneng Jiangsu was 6.78%. All remained at relatively high levels, indicating strong asset return capability.

CICC (China Merchants Securities) said that the decline in both prices and volumes led to revenue contraction, while cost optimization significantly improved thermal power performance. The differences in the three companies’ results also reflect the distinct characteristics of regional power markets. As a traditional major province for thermal power with a high proportion of coal-power capacity, Shandong benefited more during the fuel cost decline cycle, allowing profit elasticity to be fully released. In Jiangsu and Zhejiang, the rapid growth of renewable energy capacity has squeezed the generation space for thermal power units, leading to lower on-grid electricity volume and revenue pressure. However, falling fuel costs still supported growth in profit.

At present, Huaneng Jiangsu has 1 outstanding bond, with a stock size of RMB 1.0 billion; Huaneng Shandong has 2 outstanding bonds, with a stock size of RMB 3.0 billion; and Huaneng Zhejiang has 1 outstanding bond, with a stock size of RMB 0.5 billion.

In its annual report, Huaneng International stated that in 2026 it will continue to deepen its green and low-carbon transition, promote high-quality development of new energy, and continuously optimize its coal-fired power and thermal power development. Huaneng International’s regional layout in Shandong, Jiangsu, and Zhejiang will also be carried out around this strategy.

For the three companies, how to ensure regional power supply while adapting to the construction of a new type of power system, and how to increase the proportion of clean energy and improve the operating efficiency of power generation units, will be key to future development.

(China Financial News, Zhang Liang, Internship Wang Shujin)