(Reuters, Oct 26, 2006) China's Southeast Power said on Thursday its net profit rose 39 percent in the third quarter from a year earlier as it boosted installed capacity for power generation at a subsidiary.

Zhejiang Southeast Electric Power Co. Ltd, an electricity generator based in Hangzhou, posted a net profit of 233.26 million yuan ($29.5 million) in the quarter compared with 167.68 million yuan a year earlier.

The firm, which lists U.S.-dollar denominated B-shares in Shanghai (900949.SS: Quote, Profile, Research) and global depositary receipts (0949q.L: Quote, Profile, Research) in London, said its turnover rose 21 percent to 1.78 billion yuan, fuelled by a 20 percent rise in electricity output on a year earlier to 4.909 billion kilowatt-hours.

"The rise in electricity output was mainly due to a 600 MW increase in installed capacity at our Changxing Power Co. subsidiary," the firm said in the quarterly report.

Analysts have said rapidly expanding power supplies in China, the world's second-largest electricity user, will begin to hurt the bottom lines of Chinese electricity producers, including Southeast Power, in the next one or two years.

China boosted its power generating capacity by 41.94 gigawatts in the first seven months of the year, the official Xinhua news agency reported last month.

China generated more than 1.52 trillion kilowatt-hours of power in the first seven months, 12.1 percent more than in the same period last year, with usage by industry up 13.9 percent, the agency said.

Southeast Power's profit growth by far outperformed Huaneng Power International (0902.HK: Quote, Profile, Research) (HNP.N: Quote, Profile, Research) (600011.SS: Quote, Profile, Research), China's largest listed producer, which posted a 2.7 percent rise in third-quarter earnings. Another major power firm, Yangtze Electric Power (600900.SS: Quote, Profile, Research), co-operator of the giant hydropower Three Gorges, is scheduled to post results on Friday.

For the first nine months of this year, Southeast Power posted 24 percent rise in net profit to 563 million yuan from a year earlier.

Southeast Power's Shanghai B-shares, open to Chinese and foreign investors, jumped 3.76 percent to $0.441 on Thursday morning. They have risen 20 percent since the start of this year, but have still underperformed the broader market's <.SSEC> 56 percent gain because of concern over the industry's weakening prospects. ($1=7.9 Yuan)
source:Reuters