Guiguang Power 2025 Annual Report Analysis: Net profit attributable to parent increased by 43.63% to 3.28 billion yuan, while net cash flow from financing activities dropped by 48.39%

Strong Core Profitability Metrics, Hydropower Business Becomes the Main Growth Driver

Operating Revenue: Power Generation Growth Drives Steady Revenue Increase

In 2025, Guangyuan Power achieved operating revenue of RMB 10.393 billion, a year-on-year increase of 8.28%. The main driver was the company’s full-year power generation, which grew 26.68% year on year. Within that, hydropower generation reached 41.568 billion kWh, up 35.92% year on year, becoming the core driving force behind revenue growth. In terms of business structure, power business revenue was RMB 10.356 billion, accounting for 99.64% of total revenue. Among it, hydropower business revenue was RMB 8.319 billion, up 20.89% year on year; gross margin was as high as 62.78%, up 9.62 percentage points from the previous year, with profitability clearly strengthened.

Net Profit and Non-GAAP Net Profit: Profitability Level Improves Significantly

In 2025, the net profit attributable to shareholders of listed companies was RMB 3.280 billion, up 43.63% year on year; non-GAAP net profit attributable to the parent company was RMB 3.290 billion, up 35.49% year on year. The growth rate of net profit was higher than that of revenue, mainly due to effective control of operating costs. In 2025, operating costs were RMB 4.783 billion, down 10.06% year on year. This included a significant reduction in fuel costs caused by a decrease in thermal power generation volume. At the same time, the improvement in hydropower business gross margin further thickened the profit space.

Earnings per Share: Profit Growth Drives a Significant Increase in EPS

Basic earnings per share were RMB 0.4088 per share, up 47.32% year on year; non-GAAP earnings per share were RMB 0.4101 per share, up 38.59% year on year. The growth rate of earnings per share was higher than the growth rate of net profit, mainly because the company’s share capital did not change, and the increase in profits directly translated into earnings per share.

Expense Control Effect Becomes Evident; R&D Spending Focuses on Core Technologies

Overall Expense Position: Total Expenses Are Stable to Slightly Lower

In 2025, the company’s period expenses totaled RMB 8.918 billion, down 0.56% year on year. Among them, management expenses, finance expenses, and R&D expenses all showed changes to varying degrees, with the overall effectiveness of expense control becoming evident.

Selling Expenses: No Relevant Occurrence

During the reporting period, the company had no selling expenses, mainly because most of its power sales business is directly connected with grid companies, requiring no additional selling expenditures such as market promotion.

Management Expenses: Slight Increase, Optimized Structure

Management expenses were RMB 372 million, up 2.75% year on year. The main reason was that depreciation of fixed assets, insurance expenses, and information technology expenses booked in management expenses increased year on year. From the expense structure, employee compensation remained the main expense, at RMB 274 million, accounting for 73.79% of management expenses. However, its proportion declined slightly versus the prior year, further optimizing the expense structure.

Finance Expenses: Significant Effect in Reducing Financing Costs

Finance expenses were RMB 513 million, down 4.34% year on year. This was mainly due to the company’s continued efforts to reduce its financing cost rate. In 2025, interest expense was RMB 506 million, down RMB 329 million year on year, with a decrease of 6.10%. The company issued multiple financing products, such as innovative carbon asset bonds and special bonds for energy supply assurance, with issue interest rates reaching the lowest level in history. At the same time, it reduced external financing with high interest rates by more than RMB 10 billion, keeping its comprehensive financing cost rate at a leading level in the industry.

R&D Expenses: Project Phase-Out Wrap-Up, Optimized Investment Structure

R&D expenses were RMB 3.5878 million, down 10.50% year on year. This was mainly because some R&D projects reached phase-out completion, the R&D investment structure was optimized, and expenditures that were expensed rather than capitalized decreased. The company’s R&D investment for the full year was RMB 200 million, with R&D intensity of 1.92%. Key focus areas included core technologies in hydropower and new energy, such as “Research and Application of Digital Twin Technology for Giant Hydropower Generator Sets” and “Research and Application of Key Digital Twin Dam Technologies Based on BeiDou Technology,” among other group-level key scientific and technological projects. All research content has been completed, and the project meets conditions for finalization and acceptance.

R&D Personnel: Stable Team, Reasonable Structure

The company had 218 R&D personnel, accounting for 7.21% of total company headcount. In terms of educational background, 195 people held bachelor’s degrees or above, accounting for 89.45% of total R&D personnel. This included 1 doctoral student and 15 master’s students, indicating a generally high educational level within the R&D team. In terms of age structure, there were 133 R&D personnel aged 30–50, accounting for 61.01%. This formed an R&D team centered on mid-career and young professionals, combining experience with innovative vitality.

Cash Flow Structure Shows Divergence; Operating Cash Flow Is Robust

Overall Cash Flow: Net Amount Up 1.95% Year on Year

In 2025, the company’s net cash flow was RMB 885 million, up 1.95% year on year. Among them, net cash flow from operating activities increased substantially, net cash flow from investing activities decreased slightly, and net cash flow from financing activities decreased substantially. The cash flow structure showed divergence.

Cash Flow from Operating Activities: Revenue Growth Drives a Big Jump in Net Inflows

Net cash flow generated from operating activities was RMB 6.957 billion, up 24.09% year on year. The main reason was that power generation growth increased electricity tariff revenue. In 2025, cash received from the sale of goods and the provision of services was RMB 11.565 billion, up 12.00% year on year. Meanwhile, cash used in operating activities was RMB 4.884 billion, down RMB 204 million year on year. This was mainly due to a substantial decrease in cash paid for purchases of goods and acceptance of services, benefiting from the decline in thermal power generation volume, which reduced fuel procurement spending.

Cash Flow from Investing Activities: Increased New Energy Infrastructure Investment; Net Amount Slightly Down

Net cash flow generated from investing activities was -RMB 4.027 billion, down 1.96% year on year. The main reason was that investments in construction of new energy infrastructure projects increased. In 2025, cash paid for the purchase and construction of fixed assets, intangible assets, and other long-term assets was RMB 4.061 billion, up 1.87% year on year. The company added 1.1291 million kW of installed capacity throughout the year, strongly developing wind and solar power businesses and accelerating construction of new energy projects.

Cash Flow from Financing Activities: Larger Debt Repayment Scale; Net Amount Drops Sharply

Net cash flow generated from financing activities was -RMB 2.046 billion, down 48.39% year on year. The main reason was that repayments of debt increased year on year. In 2025, cash paid for repayment of debt was RMB 31.143 billion, up 23.94% year on year. At the same time, the company’s cumulative dividends in 2025 were RMB 2.310 billion, accounting for 70.42% of net profit attributable to the parent company. The high dividend payout also increased cash outflows from financing activities.

Multiple Risks Need Attention; Operating Challenges Remain

Risk from Power Policies: Deepening Power Reform Impacts the Profit Model

China’s power system reform continues to advance. All thermal power in the country has entered the market; some photovoltaic and wind power have entered the market; and hydropower in Sichuan and Yunnan has also largely been market-oriented, with spot transactions being carried out in full. Changes in power reform policies will have a profound impact on the company’s generation model and pricing model, which may cause fluctuations in profitability.

Climate Risk: High Dependence on Clean Energy; Climate Uncertainty Affects Generation Volume

The company’s clean energy installed capacity accounts for more than 90% of total installed capacity in operation. Hydropower, wind power, and photovoltaic generation volumes are heavily affected by climate changes. The company’s generating units are distributed across multiple provinces and regions, with significant geographical differences. Uncertainty in inflows, wind conditions, and solar irradiation may lead to fluctuations in power generation, thereby affecting the company’s operating performance.

Risk of Coal Price Fluctuations: Thermal Power Business Profitability Still Constrained by Coal Prices

The company’s only thermal power plant, the Heishan Power Plant, has an installed capacity of 1.33 million kW, accounting for 8.85% of installed capacity in operation. Coal prices are influenced by many factors, including domestic and international supply and demand, international circumstances, policies, transportation, and others, resulting in relatively large fluctuations. Moreover, the volume of long-term contracted coal still needs to be improved, so profitability of the thermal power business still faces the risk of coal price volatility.

Market Demand Risk: Economic Fluctuations Affect Electricity Demand

Electricity demand is closely related to economic development, and the volatility of economic development will lead to fluctuations in electricity demand. As power marketization deepens, electricity prices are increasingly affected by supply and demand relationships. If electricity supply and demand are imbalanced, electricity prices may fall, which would in turn affect the company’s performance.

Executive Compensation: Tied to Performance Growth

Chairman’s Pre-Tax Compensation During the Reporting Period: Specific Amount Not Disclosed

During the reporting period, the total pre-tax compensation received by Chairman Zhou Kewen from the company was not disclosed in the annual report in terms of specific amount.

General Manager’s Pre-Tax Compensation During the Reporting Period: RMB 1.3956 Million

General Manager Shi Jiansheng’s total pre-tax compensation received from the company during the reporting period was RMB 1.3956 million, matching the company’s performance growth, reflecting a compensation assessment mechanism linked to operating performance.

Deputy General Managers’ Pre-Tax Compensation During the Reporting Period: RMB 1.2366 Million–RMB 1.2298 Million

Deputy General Manager Tian Xiaodong’s pre-tax compensation was RMB 1.2366 million. Wang Pengyu’s was RMB 1.2132 million, and Xu Weiyou’s was RMB 1.2298 million. Their compensation levels are related to the company’s operating performance and the fulfillment of individual job responsibilities.

Chief Financial Officer’s Pre-Tax Compensation During the Reporting Period: RMB 1.1363 Million

Chief Financial Officer Sun Yinggang’s total pre-tax compensation received from the company during the reporting period was RMB 1.1363 million, consistent with the effectiveness of the company’s financial management and performance growth.

Overall, Guangyuan Power’s 2025 performance was strong, with core advantages in the hydropower business highlighted and the effectiveness of expense control evident. However, the company also faces multiple risks, including power policy, climate, coal prices, and market demand. In the future, the company needs to continue optimizing its generation mix, strengthen cost management and control, and actively respond to changes in the market to achieve sustainable development.

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