Silver Star Energy 2025 Annual Report Analysis: Net profit attributable to parent company drops 48.84%, Operating cash flow increases by 128.18%

Operating Revenue: Slight Growth with Regional Structural Differentiation

In 2025, Yinxing Energy achieved operating revenue of 1.31 billion yuan, a 3.47% increase from 1.27B yuan in 2024, maintaining a modest expansion in revenue scale.

From the revenue composition, the Northwest region remains the core source of income, with 1.02B yuan in 2025, accounting for 77.65% of total revenue, up 2.42% from 992 million yuan in 2024; North China revenue was 257 million yuan, down 5.64% year-on-year, accounting for 19.66%; meanwhile, the company added revenue layouts in East China, Southwest China, South China, Central China, and Northeast China, though each accounts for less than 3%, reflecting the company’s efforts to expand into the national market.

Quarterly-wise, operating revenues were 309 million yuan, 343 million yuan, 323 million yuan, and 334 million yuan, respectively, with relatively balanced scale across quarters, indicating steady overall operational rhythm.

Profitability Indicators: Sharp Decline in Net Profit, Profit Quality Under Pressure

Net Profit Attributable to Parent: Nearly Halved, Significant Quarterly Loss

In 2025, net profit attributable to shareholders of the listed company was 44.46 million yuan, a 48.84% decrease from 86.91 million yuan in 2024, nearly halving the profit scale.

Quarterly data shows that net profits for the first three quarters were 72.56 million yuan, 92.78 million yuan, and 72.10 million yuan, all profitable and stable in scale, but the fourth quarter saw a large loss of 193 million yuan, directly dragging down the annual profit level and becoming the main reason for the overall decline.

Deducted Non-Recurring Profit: Down Over 30%, Core Business Profit Shrinks

Net profit attributable to shareholders after deducting non-recurring gains and losses was 35.08 million yuan, down 34.34% from 53.44 million yuan in 2024, indicating a significant contraction in core business profitability.

Quarterly-wise, the first three quarters recorded deducting non-recurring profit of 71.87 million yuan, 90.03 million yuan, and 69.23 million yuan, respectively, with a loss of 196 million yuan in the fourth quarter, consistent with the trend of quarterly fluctuations in net profit, indicating that core business faced substantial profit impact in Q4.

Earnings Per Share: Declined Alongside Net Profit

In 2025, basic earnings per share (EPS) was 0.0484 yuan/share, down 48.89% from 0.0947 yuan/share in 2024; non-recurring EPS was 0.0382 yuan/share, down 34.36% from 0.0582 yuan/share, with the decline in both metrics roughly matching the changes in net profit, reflecting that EPS decreased in tandem with the company’s overall profitability.

Expenses: Clear Structural Differentiation, Selling Expenses Nearly Zero

Total operating expenses in 2025 were 182.65 million yuan, down 8.03% from 198.60 million yuan in 2024, with notable differences among expense items:

Selling Expenses: Nearly Zero, Scale Drastically Reduced

In 2025, selling expenses were only 17.4k yuan, a 97.84% decrease from 806.1k yuan in 2024, nearly eliminated, mainly due to a sharp reduction in sales service fees, reflecting that the company’s marketing and sales-related investments were almost halted this period.

Management Expenses: Continued Growth, Management Pressure Evident

Management expenses reached 67.65 million yuan, up 16.37%, maintaining growth for two consecutive years, mainly due to increased management-related costs, indicating rising internal control pressures.

Financial Expenses: Driven Down by Dual Factors, Cost Optimization

Financial expenses were 114.98 million yuan, down 15.62%, mainly due to decreased loan balances and lower interest rates, jointly reducing financing costs and optimizing the company’s cost structure.

R&D Expenses: No Expenses, Structural Investment Changes

In 2025, R&D expenses were zero, down 100% from 3.39 million yuan in 2024, mainly because no expenses were incurred for R&D projects this period. It is possible that R&D investments were capitalized or that project progress led to a temporary halt in expense recognition, but the large fluctuation warrants attention to potential impacts on technological reserves.

R&D Personnel: No Relevant Information Disclosed

Cash Flow: Operating Cash Flow Surges, Investment and Financing Cash Flows Under Pressure

In 2025, the company’s cash flows showed an “increase and two decreases” pattern, with significant variations across indicators:

Operating Cash Flow: Doubling, Significant Improvement in Receipts

Net cash from operating activities was 1.22 billion yuan, up 128.18% from 535 million yuan in 2024, doubling. The main reason was a substantial increase in renewable energy electricity price subsidy funds (subsidy payments), with total operating cash inflow reaching 1.78B yuan, up 62.12%; meanwhile, outflows were only slightly down 0.59%, with both inflows and outflows contributing to the large improvement in operating cash flow.

Quarterly-wise, Q3’s operating cash flow was 851 million yuan, the largest contributor for the year, mainly due to concentrated subsidy payments in that quarter.

Investing Cash Flow: Outflows Significantly Increased, Net Continues Negative

Net cash from investing activities was -681 million yuan, down 56.08% from -437 million yuan in 2024, with net outflows further expanding. The outflows totaled 685 million yuan, up 44.96%, mainly due to investments in the construction of Phase I and II of Sun Mountain wind projects and cash payments for the acquisition of part of the Alxa New Energy 200MW wind project. The inflows were only 3.18 million yuan, down 91.10%, mainly due to reduced proceeds from disposal of scrapped assets related to the Helan Mountain “big to small” upgrade project.

Financing Cash Flow: Outflows Expand, Funding Pressure Evident

Net cash from financing activities was -577 million yuan, down 64.61% from -351 million yuan in 2024, with net outflows significantly larger. The inflows totaled 561M yuan, down 10.10%, mainly due to a decrease in net borrowings from the capital pool; outflows were 1.28B yuan, up 4.63%, mainly due to increased repayment of long-term loans, raising debt repayment costs and pressure on capital recovery.

Potential Risks: Three Major Risks Threatening Profit Stability

Grid Connection Price Fluctuation Risk

With the deepening of power system reforms, market-based trading participation for renewable projects has become the trend. Grid connection prices are formed by the market and affected by equipment operation, supply-demand relations, and other factors, posing certain volatility risks. A decline in market electricity prices would directly impact the company’s power generation revenue and profit levels, bringing uncertainty to operational performance.

Power Generation Volume Fluctuation Risk

First, wind and solar power generation depend on natural resources, with intermittent and fluctuating wind and sunlight, leading to large annual variations in power output; second, constraints from regional power load absorption capacity and grid peak regulation may cause wind and solar curtailment, affecting output; third, changes in the operation and utilization efficiency of renewable energy equipment can also cause fluctuations in power output, impacting profitability.

Funds Chain Risk from Delayed Subsidy Payments

Currently, the settlement cycle for renewable energy subsidies is generally long, with delays in disbursement. The actual subsidies received are lower than receivables, creating large accounts receivable. To ensure daily operational funds, the company needs to supplement liquidity through bank loans and internal capital pool borrowings, increasing costs and putting pressure on the stability of the capital chain. Continued delays in subsidy payments could further exacerbate the company’s liquidity tension.

Senior Management Compensation: Chairman’s Pay Relatively Low, Core Management Stable

Chairman’s Pre-tax Compensation: 115k Yuan

During the reporting period, Chairman Qin Zhen received a total pre-tax remuneration of 115k yuan, among the lower levels in the core management team.

General Manager’s Pre-tax Compensation: 599.9k Yuan

Executive Vice President Wang Wenlong also serves as General Manager, with pre-tax remuneration of 599.9k yuan during the period, one of the main compensation levels among core management.

Vice Presidents’ Pre-tax Compensation: Ranges from 259.1k to 580.5k Yuan

Vice Presidents Ma Liping, Gu Weibao, Gao Libing, and Li Yang received pre-tax remunerations of 580.5k yuan, 488.7k yuan, 474.1k yuan, and 259.1k yuan, respectively. Compensation levels vary, mainly related to tenure and responsibilities. Li Yang, who started in August 2025, has less than half a year’s tenure and a relatively lower pay.

Chief Financial Officer’s Pre-tax Compensation: 477.1k Yuan

CFO Zuo Yan received a pre-tax remuneration of 477.1k yuan, close to that of Vice President Gao Libing, consistent with their respective roles.

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