Huaneng's gross power generation in China slipped 2.1% to 313.6m MWh

Average plant utilisation also dropped 5.4%.

After seeing Huaneng’s lower than expected 2016’s net profit, Citi trims its 2017E net profit by 34% on higher unit coal cost (+15% yoy in 2017E), but increase its 2018E net profit by 43% factoring in its new assumption of a 6% ongrid benchmark tariff hike on 1 Jan 2018E. 

Huaneng’s net profit was -37.6% yoy to Rmb8,520m in 2016, 4% below consensus. Stripping out one-off items of Rmb1,208m (-61% yoy) impairment loss and Rmb250m (+9.3x yoy) forex loss, recurrent net profit was -40% yoy to Rmb9,979m in 2016 mainly on net generation cut (-2.1% yoy) and tariff cut (-10.5% yoy).

Here's more from Citi:

In PRC GAAP, it made Rmb574m net loss in 4Q16; stripping-out one off items, it had Rmb259m recurrent net loss in the period. Final DPS was -38% yoy to Rmb0.29, with payout at 52% (+1.9ppts yoy).

Huaneng’s PRC gross generation was -2.1% yoy to 313.6M MWh in 2016 with average utilisation -5.4% yoy to 3,921 hours for all plants & -2.4% yoy to 4,107 hours for coal-fired ones. It targets its PRC gross generation +25% yoy to 392M MWh in 2017E with (i) utilisation to - 3.1% yoy to 3,800 hours & (ii) attributable capacity +21.4% yoy in 2017E.