|Bid||1.500 x 0|
|Ask||1.510 x 0|
|Day's Range||1.470 - 1.510|
|52 Week Range||1.400 - 2.330|
|Beta (5Y Monthly)||0.94|
|PE Ratio (TTM)||18.52|
|Forward Dividend & Yield||0.11 (7.33%)|
|1y Target Est||2.23|
(Bloomberg) -- China is pursuing a three-year pilot program, led by five of its biggest utilities, to integrate and cut some coal-fired power capacity to help the debt-saddled industry, state media reported.The pilot, which runs through 2021, will seek to consolidate coal-power assets within five northwestern regions and reduce their capacity by up to one-third, according to a Shanghai Securities News, citing sources it didn’t identify.State-owned Assets Supervision & Administration Commission, which oversees the utilities, didn’t immediately respond to a faxed request for comment. Nobody answered calls to the media offices of the five companies -- China Huaneng Group Co., China Datang Corp., China Huadian Corp., State Power Investment Corp. and China Energy Investment Corp.The five firms had a combined 520 gigawatts of coal-fired capacity at the end of last year, according to the Shanghai Securities News report, adding that those coal-power units had total combined liabilities of 1.1 trillion yuan ($156 billion) and assets worth 1.5 trillion. China’s coal plants are distributed across 30 provinces and territories, of which 15 saw losses in the coal and power business last year, according to the report.Read More: All Eyes on Top Polluter China as Global Climate Talks BeginSeveral of the companies’ listed affiliates advanced on Tuesday. Huaneng Power International Inc. rose 3.8% in Hong Kong, one of the biggest gainers on the MSCI Emerging Markets Asia Utilities Index, which was up 0.7% on the day. Inner Mongolia Mengdian Huaneng Thermal Power Corp. gained 3.5% while Datang International Power Generation Co. added 2.1%.Coal plants nationwide ran at only 49% of their capacity during the third quarter, BloombergNEF analyst Hanyang Wei said in a report Tuesday, citing slower overall demand growth as the trade war impacts the economy, as well as competition from nuclear and hydropower.Industry BenefitThe plan to retire capacity is expected to boost profitability of some power companies, China International Capital Corp. analyst Liu Jiani said in a note. The entire industry to could benefit if the program is extended to other provinces, Liu said.President Xi Jinping’s government has been seeking to balance sweeping supply-side reforms to cut overcapacity and debt across industries, including coal and steel, with an economy slowing under the pressure of a prolonged trade war with the U.S.Reuters earlier reported that China planned to merge the coal-power assets of the five companies.China mines and burns about half the world’s coal, which meets about 60% of the nation’s total energy needs, even though it’s also the top investor in solar and wind power. The power sector could begin to feel pressure next year when regulators plan to allow some market-based mechanisms to set coal power prices, which may erode profits.Five AreasUnder the trial program, each of the five state utilities will be tasked with leading asset consolidation and capacity reductions in one of the five provinces or territories: Huaneng in Gansu; Datang in Shaanxi; Huadian in Xinjiang; SPIC in Qinghai; and CEIC in Ningxia, the report said. The program could be expanded in the future, it added.The five provinces had 143 gigawatts of coal-fired power plants installed as of the first half of this year, BNEF analyst Yvonne Yujing Liu said. They also had about 129 gigawatts combined of solar, wind and hydropower, limiting the average capacity factor of coal plants to about 50%, she said.Assets controlled by listed units of the five companies can be transferred first into the parent companies or replaced in a “market-based” manner, according to the report. Some of those listed companies traded on mainland exchanges include:Huaneng: Huaneng Power International Inc.Datang: Datang International Power Generation Co., Datang Huayin Electric Power Co.Huadian: Huadian Power International Corp., Guizhou Qianyuan Power Co.SPIC: Shanghai Electric Power Co.CEIC: China Shenhua Energy Co., GD Power Development Co.(Updates to close share prices in fifth paragraph, analyst comment in 12th paragraph.)To contact the reporters on this story: Alfred Cang in Singapore at firstname.lastname@example.org;Dan Murtaugh in Singapore at email@example.comTo contact the editor responsible for this story: Ramsey Al-Rikabi at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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