STOCKWATCH: Shandong International Power lower after results

HONG KONG (AFX-ASIA) - Shandong International Power shares were lower after releasing unsurprising 2000 results yesterday, dealers said. They said the company will pursue different expansion plans this year, including new construction for its Laicheng power plant and the potential acquisition of a power plant in Shanxi province. At 11:20 am, Shandong International was down 0.02 hkd at 1.44, on trade of 6.96 mln shares. The Hang Seng index was down 15.74 points at 14,305.31. Shandong International posted a net profit of 1.33 bln yuan in 2000, compared with 1.15 bln a year earlier. Edmond Lee, an analyst with JP Morgan Chase, said earnings growth was driven by the rise in power consumption in Shandong and the returns of the newly acquired power plants from its major shareholder Shandong International Trust and Investment Corp. In 1999, the company bought a stake in three power plants from Shandong Electric Power Group and its major shareholder Shandong International Trust and Investment Corp. They comprised Laicheng power plant, Qingdao Plang, and Weifang Plang. According to the company, power consumption in Shandong Province accumulated to 100,071 mln kWh in 2000, an increase of 9.70 pct from the previous year. "Everything is within market expectation, and there is no surprise at all," he said. Looking forward, he said the company will take a stake in a power plant in Shanxi, and further expand its Laicheng power plant operations. "The operation of the newly acquired Qingdao power plant was suspended ... this is one of our major concerns, but the company will surely look for other opportunities," he said. An analyst with a European brokerage said the results were in line with his forecast, although the company proposed a higher-than-expected final dividend of 0.058 yuan in 2000 compared with 0.0365 yuan a year earlier. "A lot of H-share companies did not propose any dividend in the past ... and they may have realised that investors are looking for a higher yield," he said. He agreed that the company will continue to expand its business through power plant acquisition. "The company is reported to be interested in taking a stake in a power plan in Shanxi ... but the acquisition will unlikely contribute to revenue in the near term," he said. He said his house has a "buy" recommendation on Shandong International Power.

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