Cinda Securities: Assigns a Buy rating to Gansu Energy

Xinda Securities Co., Ltd. recently conducted research on Gansu Energy and released a research report titled “Chang Le Thermal Power Shows Impressive Profit Performance, ‘Electricity Calculation Synergy’ Project Expected to Improve Sector Earnings,” giving Gansu Energy a buy rating.

Gansu Energy (000791)

Event: On March 27, 2026, Gansu Energy released its 2025 annual report. In 2025, the company achieved operating revenue of 9.065 billion yuan, a year-on-year increase of 4.26%; net profit attributable to shareholders was 2.051 billion yuan, a year-on-year increase of 24.77%; and net profit after deducting non-recurring items was 2.039 billion yuan, a year-on-year increase of 183.32%. The net cash flow from operating activities was 5.152 billion yuan, a year-on-year increase of 31.64%. In Q4 alone, the company achieved operating revenue of 2.541 billion yuan, a year-on-year increase of 14.84% but a quarter-on-quarter decrease of 2.07%; net profit attributable to shareholders was 470 million yuan, a year-on-year increase of 81.64% but a quarter-on-quarter decrease of 37.96%. In terms of dividends, the company intends to distribute a cash dividend of 2.30 yuan (including tax) for every 10 shares to all shareholders in 2025, with a total cash dividend payout of 746 million yuan.

Commentary:

Thermal Power Business Situation: The full production of Chang Le Phase II, along with volume and price contributions, has led to outstanding performance. In terms of electricity volume, the cumulative on-grid electricity generated by thermal power in 2025 was 20.262 billion kilowatt-hours, a year-on-year increase of 4.08%; in Q4 alone, the company’s on-grid electricity from thermal power was 6.018 billion kilowatt-hours, a year-on-year increase of 8.53% and a quarter-on-quarter increase of 12.17%. In terms of electricity price, the thermal power electricity price in 2025 was 369.53 yuan per megawatt-hour, a year-on-year increase of 1.72 cents per kilowatt-hour. In terms of costs, the operating cost of the thermal power sector in 2025 decreased by 6.47% year-on-year, while revenue increased by 10.43% year-on-year, jointly supporting a gross profit margin expansion of 9.91 percentage points. In summary, the 5-6 units of Chang Le Phase II were put into operation in September and October 2025, respectively, with both year-on-year and quarter-on-quarter increases in thermal power on-grid electricity; and the overall electricity price also saw a year-on-year increase, alongside a year-on-year decline in annual coal costs, contributing to the performance growth of the Q4 thermal power sector. We expect the company’s thermal power performance in 2026 to further improve due to the full production of Chang Le Phase II throughout the year.

Hydropower Business Situation: Insufficient water flow led to a year-on-year decline in electricity volume, while the increase in electricity price is a highlight. In terms of electricity volume, the cumulative on-grid electricity generated by hydropower in 2025 was 5.639 billion kilowatt-hours, a year-on-year decrease of 8.87%; in Q4 alone, the company’s hydropower on-grid electricity was 1.568 billion kilowatt-hours, a year-on-year increase of 11.05% but a quarter-on-quarter decrease of 27.81%. In terms of electricity price, the hydropower electricity price in 2025 was 322.77 yuan per megawatt-hour, a year-on-year increase of 5.38 cents per kilowatt-hour. Overall, the decline in hydropower volume was due to decreased water flow in the Yellow River, Heihe River, and Datu River basins; however, appropriate hydropower trading led to a significant increase in on-grid electricity prices.

New Energy Business Situation: A decline in utilization hours and electricity prices led to slight losses in the sector, along with the “Electricity Calculation Synergy” project. In terms of electricity volume, the cumulative on-grid electricity generated by wind power in 2025 was 1.602 billion kilowatt-hours, a year-on-year decrease of 3.96%; in Q4 alone, wind power on-grid electricity was 334 million kilowatt-hours, a year-on-year increase of 27.97% but a quarter-on-quarter decrease of 20.85%. For solar power, the cumulative on-grid electricity in 2025 was 0.975 billion kilowatt-hours, a year-on-year decrease of 4.79%; in Q4 alone, solar power on-grid electricity was 180 million kilowatt-hours, a year-on-year decrease of 20.00% and a quarter-on-quarter decrease of 30.50%. In terms of electricity price, the wind power electricity price in 2025 was 377.87 yuan per megawatt-hour, a year-on-year decrease of 13.97 cents per kilowatt-hour. For solar power, the electricity price was 305.14 yuan per megawatt-hour, a year-on-year decrease of 5.67 cents per kilowatt-hour. Overall, the new energy sector experienced a simultaneous decline in volume and price due to reduced utilization hours and market trading issues, with Jiu Hui Company, which is part of the new energy sector, reporting a net loss of 54.69 million yuan. However, the company’s new energy incremental project, the Qinyang Green Electricity Aggregation Phase I project, has already commenced construction. Since the Qinyang Green Electricity Aggregation Phase I project is an “Electricity Calculation Synergy” project, it will directly supply green electricity to the data center. Therefore, we expect the utilization hours of the Qinyang project to be supported by stable power demand from the data center, thereby improving the overall returns of the sector.

Core Advantages: Electricity calculation synergy helps absorb green electricity; new energy project reserves + potential thermal power injection bring performance growth. The company’s coal-fired power plant Chang Le Phase II has already been put into operation, with a total installed capacity of 7.7 GW from thermal and hydropower, forming the company’s performance foundation. In addition, the first batch of wind turbines for the Qinyang Dong Shu Xi Su industrial park green electricity aggregation pilot project, a 1,000,025 kW new energy project (wind power project 750,025 kW, solar power project 250,000 kW), has been put into operation at the end of January 2026, with the subsequent Phase II project of 1,000,000 kW also passing feasibility review in March. The “Electricity Calculation Synergy” direct connection project is expected to assist the company in absorbing new energy. Meanwhile, the company has approved reserves of 7 million kW new energy projects, and the potential for further expansion of new energy capacity is significant, likely to continuously drive performance growth. Furthermore, the profitability of the group’s coal-fired power assets in Zhangye/Wuwei/Jinchang is expected to further improve as coal prices gradually return to a reasonable range; with a total installed capacity of 4.67 GW in operation and under construction, if injected into the listed company, the growth of the company’s thermal power sector will be considerable.

Profit Forecast and Investment Rating: Gansu Energy, as the leading power operator in Gansu Province with a conventional energy integration platform, benefits from group shareholder advantages, with collaborative development of thermal, hydropower, wind, and solar energy sources, providing strong stability in performance; coupled with the continuous implementation of future construction and injection projects, it shows high growth potential while maintaining stable operations. We adjust the company’s net profit attributable to shareholders for 2026-2028 to be 2.108 billion/2.294 billion/2.537 billion yuan respectively; the corresponding P/E ratios at the closing price on March 27, 2026, are 13.25/12.18/11.01 times, maintaining a “buy” rating.

Risk Factors: Risks of significant coal price increases, risks of declines in electricity prices and utilization hours, and risks of project construction progress falling short of expectations.

The latest profit forecast details are as follows:

In the last 90 days, 1 institution has given a rating for the stock, with 1 buy rating; the average target price from institutions in the past 90 days is 9.55.

The above content is organized by Securities Star based on public information and generated by AI algorithms (Internet Information Calculation License No. 310104345710301240019), and does not constitute investment advice.