New Energy Group 2025 Annual Report Analysis: R&D Expenses Increased by 434.34%, Net Investment Cash Flow Decreased by 209 million yuan

Operating Income: Slight Decline, Business Structure Differentiation

In 2025, Xinjie Energy achieved an operating income of 12.28 billion yuan, a year-on-year decline of 3.51%. By business segment, coal mining revenue was 7.216 billion yuan, down 6.68% year-on-year; power generation revenue was 5.064 billion yuan, an increase of 1.39% year-on-year.

The decline in coal business revenue was mainly affected by relaxed supply and demand in the industry and a downward shift in price levels. However, the company’s commodity coal production was 19.7582 million tons and sales were 19.6929 million tons, reflecting year-on-year increases of 3.69% and 4.35%, respectively. The core reason for the revenue decline was the increase in volume coupled with price drops. The slight increase in power generation revenue was due to a year-on-year increase in electricity generation of 10.40% to 14.223 billion kilowatt-hours, and grid-connected electricity increased by 10.06% to 13.446 billion kilowatt-hours, offsetting the decline in thermal power gross profit margins.

Net Profit: Dual Decline Year-on-Year, Profitability Under Pressure

The net profit attributable to shareholders of the listed company was 2.136 billion yuan, a year-on-year decrease of 10.73%; the net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was 2.140 billion yuan, a year-on-year decline of 10.37%. The decrease in net profit after deducting non-recurring items was slightly smaller than that of net profit, mainly due to non-recurring gains and losses totaling -4.3024 million yuan, which was a decrease from the previous year’s 4.8109 million yuan, having limited impact on net profit.

From the quarterly data, the company’s profitability showed a trend of improvement quarter by quarter, with a net profit attributable to the parent company of 660 million yuan in the fourth quarter, the highest for the year, indicating some improvement in profitability in the second half of the year. However, the year-on-year decline trend for the whole year remained difficult to change.

Earnings Per Share: Declining Along with Net Profit

Basic earnings per share were 0.825 yuan/share, a year-on-year decrease of 10.71%; earnings per share after deducting non-recurring items were 0.826 yuan/share, a year-on-year decrease of 10.41%. The changes in these two indicators matched the decline in net profit and net profit after deducting non-recurring items, reflecting that the company’s earnings per share contracted in line with overall profitability.

Expenses: Slight Decrease in Total, Significant Surge in R&D Expenses

In 2025, the company’s total operating expenses were 1.366 billion yuan, a year-on-year decrease of 2.63%. The expense structure showed clear differentiation:

• Selling Expenses: Increased by 5.72% year-on-year, mainly due to increased investments in market expansion and customer maintenance.
• Management Expenses: Slightly decreased by 1.08% year-on-year, with the scale remaining stable, indicating consistent internal control efficiency.
• Financial Expenses: Decreased by 6.99% year-on-year, mainly due to optimization of the company’s debt structure, a reduction in the repayment of special loans, and decreased interest expenses.
• R&D Expenses: Increased significantly by 434.34% year-on-year, rising from 92.61 million yuan to 494.83 million yuan, mainly due to the company’s increased investment in research on comprehensive water prevention and control technology under multi-source aquifer conditions during coal mining production periods, focusing on safety production-related technologies.

R&D Personnel Situation: Stable Team Size, Mature Structure

The number of R&D personnel in the company was 288, accounting for 1.96% of the total staff. In terms of educational background, there were 189 individuals with a bachelor’s degree or higher, accounting for 65.62% of the total R&D staff, indicating a strong technical research foundation. In terms of age structure, there were 132 R&D personnel aged 40-50 years, accounting for 45.83%, and 103 R&D personnel aged 30-40 years, accounting for 35.76%. The R&D team is primarily composed of younger and middle-aged individuals, combining experience and vitality, providing stable talent support for the company’s technological research and development.

Cash Flow: Operating Cash Flow Shrinks, Investment Cash Flow Continues to Flow Out

In 2025, the company’s cash flow showed a pattern of “narrowing operations, expanding investment outflow, and slight increase in financing”:

• Net Cash Flow from Operating Activities: Decreased by 10.25% year-on-year, mainly due to cash paid for purchasing goods and receiving services exceeding the same period, reflecting an increase in capital occupation in the company’s production and operation.
• Net Cash Flow from Investment Activities: The net outflow expanded further to 7.216 billion yuan, an increase of 209 million yuan year-on-year, mainly due to ongoing investments in new projects for Shangrao, Chuzhou, and Lu’an power plants, as the company is in a period of power capacity expansion, resulting in significant capital expenditure pressure.
• Net Cash Flow from Financing Activities: Net inflow of 4.360 billion yuan, a year-on-year increase of 3.81%, mainly due to a decrease in the repayment of special loans, while maintaining a high level of financing to meet the funding needs for power plant construction, supporting large expenditures in investments.

Potential Risks: Dual Pressure from Market and Policy

2. Market Price Fluctuation Risk: Affected by domestic coal and electricity market policies and changes in supply and demand relationships, the company faces price fluctuation risks for its main products, coal and electricity. In 2025, the relaxed supply and demand in the coal market and the downward shift in price levels have impacted the company’s coal business revenue; the electricity market is facing pressure on profitability stability due to the growth of new energy installations and the prominent peaking attributes of thermal power.
3. Safety Production Risk: The coal mining and selection production process involves underground operations, posing safety risks such as roof collapses, water hazards, and gas. Although the company has increased investment in research on water prevention technology, safety production still faces challenges, and any safety incident could adversely affect production and operations.
4. Industry Policy Risk: Under the “dual carbon” goals, the coal industry faces pressure for green transformation, while the electricity industry must cope with policy changes related to new energy substitution and electricity market reforms. Adjustments in relevant industry policies may impact the company’s business layout and profitability model.

Compensation for Directors, Supervisors, and Senior Executives: Disclosure of Core Executive Compensation

During the reporting period, the chairman Liu Feng received a total pre-tax compensation of 687,300 yuan from the company, while the general manager Cheng Maojiu received a pre-tax compensation of 675,300 yuan. The pre-tax compensation for vice presidents ranged from 473,300 yuan to 653,800 yuan, and the financial director Dong Jie received a total pre-tax compensation of 563,300 yuan. Overall, the compensation for the company’s core executives is generally in line with the industry state-owned enterprise level and corresponds to the company’s profitability scale.

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Editor: Xiao Lang Quick Report