Core Viewpoint - The wind power sector is experiencing significant activity, with major stocks showing notable gains, indicating a positive market sentiment and potential growth in the industry [1] Group 1: Stock Performance - Goldwind Technology (02208) increased by 4%, reaching HKD 12.47 [1] - Datang New Energy (01798) rose by 3.95%, trading at HKD 2.63 [1] - Longyuan Power (00916) saw a 3.11% increase, priced at HKD 7.96 [1] Group 2: Industry Insights - GF Securities noted that the wind power industry is seeing significant improvements in profitability, particularly in the complete machine and cable segments, with leading companies experiencing a doubling of non-recurring net profits year-on-year [1] - The industry's return on equity (ROE) is stabilizing and recovering, with the wind turbine and gearbox segments having reached the bottom of the industry cycle, suggesting a potential turning point for profitability [1] Group 3: Installation and Demand - According to Huachuang Securities, the wind power sector has seen a double increase in installation tenders in the first half of the year, with continued optimism for the second half [1] - The total newly installed wind power capacity reached 51.4 GW in the first half of the year, marking a year-on-year increase of 98.9%, with offshore and onshore installations contributing 2.5 GW and 48.9 GW respectively, reflecting increases of 200% and 95.5% year-on-year [1]

Group 1 - Longyuan Power's stock price remained unchanged at 0.00% on September 17, with a trading volume of 76.74 million yuan [1] - The financing buy-in amount for Longyuan Power on the same day was 7.27 million yuan, while the financing repayment was 6.95 million yuan, resulting in a net financing buy-in of 318,800 yuan [1] - As of September 17, the total balance of margin trading for Longyuan Power was 64.77 million yuan, with the financing balance accounting for 0.08% of the circulating market value, indicating a low level compared to the past year [1] Group 2 - Longyuan Power Group Co., Ltd. was established on January 27, 1993, and listed on January 24, 2022, with its main business involving power system and electrical equipment technology transformation, service, and production maintenance [2] - As of June 30, Longyuan Power reported a revenue of 15.66 billion yuan for the first half of 2025, a year-on-year decrease of 17.09%, and a net profit attributable to shareholders of 3.38 billion yuan, down 11.82% year-on-year [2] Group 3 - Longyuan Power has distributed a total of 5.98 billion yuan in dividends since its A-share listing, with 4.75 billion yuan distributed over the past three years [3] - As of June 30, 2025, the top ten circulating shareholders of Longyuan Power included Hong Kong Central Clearing Limited, which increased its holdings by 174,100 shares, and several ETFs that also saw increases in their holdings [3]

Core Insights - The National Data Bureau of China has officially released the first batch of high-quality data set typical case lists during the 2025 China International Big Data Industry Expo, highlighting the importance of high-quality data sets in various industries [1][4] - The State Energy Group has successfully had multiple projects selected, showcasing its leading capabilities in the application of data elements and digital transformation within the energy sector [1][3] Group 1 - The "Basin Water Disaster Monitoring and Prevention High-Quality Data Set" and the "Wind Power Equipment Diagnosis and Safety Prevention Data Set" have been recognized as national typical cases, indicating their significance in the energy sector [1][3] - The "Large-Scale High-Quality Hydropower Basin Dispatch Data Set" and the "High-Quality Data Set for the Wind Power Industry" have been included in the first batch of national high-quality data set construction pilot projects, emphasizing the focus on enhancing data quality and operational capabilities [1][3] Group 2 - The projects rely on the data center pilot construction in the hydropower business field, aiming to improve the construction and application of high-quality data sets, thereby promoting the development and implementation of large model applications in the hydropower sector [3] - The "Wind Power Equipment Diagnosis and Safety Prevention Data Set" integrates multi-source heterogeneous data to create a comprehensive operational status profile for wind power equipment, transitioning from reactive fault handling to preventive maintenance [3] - The "High-Quality Data Set Construction Project for the Wind Power Industry" focuses on systematic data governance across seven core business areas, facilitating data asset aggregation, governance, sharing, and trading throughout the entire lifecycle and industry chain [3][4]

Market Overview - The electricity sector experienced a decline of 0.59% on the previous trading day, with Jiaze New Energy leading the drop [1] - The Shanghai Composite Index closed at 3861.87, up 0.04%, while the Shenzhen Component Index closed at 13063.97, up 0.45% [1] Stock Performance - Notable gainers in the electricity sector included: - Hengtong Co., Ltd. (600226) with a closing price of 4.07, up 6.54% and a trading volume of 2.8267 million shares, totaling 1.147 billion yuan [1] - Hangzhou Thermal Power (605011) closed at 22.69, up 5.88% with a trading volume of 145,600 shares, totaling 330 million yuan [1] - Changqing Group (002616) closed at 7.24, up 4.62% with a trading volume of 386,000 shares, totaling 276 million yuan [1] - Conversely, significant decliners included: - Jiaze New Energy (6191919) closed at 4.42, down 5.15% with a trading volume of 2.068 million shares, totaling 926 million yuan [2] - Huami Environmental Energy (600475) closed at 17.00, down 4.92% with a trading volume of 475,900 shares, totaling 829 million yuan [2] - Shanghai Electric Power (600021) closed at 21.07, down 2.81% with a trading volume of 2.047 million shares, totaling 4.379 billion yuan [2] Capital Flow - The electricity sector saw a net outflow of 2.127 billion yuan from major funds, while retail investors contributed a net inflow of 1.566 billion yuan [2] - Specific stock capital flows included: - Luxiao Technology (002617) with a net inflow of 19.8 million yuan from major funds, but a net outflow of 36.984 million yuan from retail investors [3] - Hangzhou Thermal Power (605011) had a net inflow of 21.272 million yuan from major funds, while retail investors contributed a net inflow of 120,050 yuan [3]

Core Viewpoint - Longyuan Power's stock price has shown a year-to-date increase of 9.55%, but has recently experienced a decline of 5.09% over the past five trading days, indicating volatility in its market performance [2]. Financial Performance - As of June 30, Longyuan Power reported a revenue of 15.657 billion yuan, a year-on-year decrease of 17.09%, and a net profit attributable to shareholders of 3.375 billion yuan, down 11.82% year-on-year [3]. - The company has distributed a total of 5.978 billion yuan in dividends since its A-share listing, with 4.746 billion yuan distributed over the past three years [4]. Stock Market Activity - On September 16, Longyuan Power's stock price fell by 2.02%, trading at 16.96 yuan per share, with a total market capitalization of 141.782 billion yuan [1]. - The stock has seen a net outflow of 4.8777 million yuan in principal funds, with significant selling pressure observed [1]. Shareholder Composition - As of June 30, 2025, Longyuan Power had 41,000 shareholders, an increase of 1.18% from the previous period [3]. - The top ten circulating shareholders include notable institutional investors, with increases in holdings for several ETFs [4].

Summary of Longyuan Power Conference Call Company Overview - Longyuan Power is a wind power business integration platform under the State Energy Group and is the largest wind power operator globally as of mid-2025, with a controlling stake of 59% held by the State Energy Group [6][12] - The group has a total installed capacity of 355 GW, with 122 GW in green energy, of which Longyuan Power accounts for 46% in wind and 19% in solar [6][12] Industry Dynamics - The domestic wind and solar installation has reached a turning point, with significant policy support leading to a recovery in cash flow for companies like Longyuan Power [2][3] - The implementation of Document No. 136 and mandatory green energy consumption policies have driven the price-to-book ratio (P/B) recovery to 0.76, although it remains at historical lows [2][12] Financial Performance - Longyuan Power's long-term return on equity (ROE) has been stable at 8%-9%, with only two years (2013 and 2022) showing declines due to external factors [7][8] - The company’s electricity price from desulfurization has decreased from 0.5 yuan per kWh in 2017 to 0.19 yuan per kWh in mid-2025, reflecting market pressures [2][9] - The company’s P/B ratio has dropped from a peak of 2.34 in September 2021 to a low of 0.52 in February 2024, with a slight rebound to around 0.76 [4][5] Cash Flow and Valuation - Longyuan Power is expected to face a free cash flow deficit of 12.1 billion yuan in 2024, but with a slowdown in conventional project development and accelerated national subsidy repayments, free cash flow may turn positive in 2025 [4][17] - The company’s accounts receivable stood at 49.5 billion yuan, representing 56% of net assets, indicating a high dependency on subsidy recoveries [18] Future Growth and Asset Development - Future growth will be supported by the injection of approximately 4 GW of green energy units from the group, upgrades to older units, and over 5 GW of offshore wind power reserves [14][15] - The company aims to add 7.5 GW of new capacity in 2024 and 5 GW in 2025, focusing on high-quality resource areas [13][14] Market Conditions and Pricing - The market for green certificates has seen a significant decline in prices, but recent policy changes have led to a recovery, with trading volumes increasing substantially [19] - The competitive advantage of wind power over solar is highlighted by better alignment with load curves and higher market prices [15] Profit Forecast - Longyuan Power's projected net profits for 2025, 2026, and 2027 are 6.43 billion yuan, 7.22 billion yuan, and 7.93 billion yuan, respectively, indicating growth rates of 0.1%, 12%, and 10% [20] Conclusion - Longyuan Power is positioned to benefit from industry recovery and policy support, with a strong asset base and growth potential despite current market pressures and historical low valuations [2][20]

Investment Rating - The report maintains a "Positive" investment rating for the utility industry [1] Core Insights - The first mechanism electricity price bidding results for renewable energy in Shandong have been released, indicating a significant market-oriented shift in policy [3][17] - Wind power mechanism electricity price is set at 319 CNY/MWh, which is a 20% premium over the 2024 average spot trading price, while solar power is at 225 CNY/MWh, a 33% premium [3][24] - The report emphasizes the importance of management and operational capabilities for renewable energy operators in a market-driven environment [4][30] Summary by Sections Electricity Sector - The Shandong province has become the first to implement a market-oriented mechanism for renewable energy pricing, with significant participation from over 3000 projects [18][21] - The mechanism electricity volume for wind power is 59.67 billion kWh, while for solar power it is only 12.48 billion kWh, reflecting a stronger policy support for wind energy [3][23] - The report suggests that the future of solar power installations in Shandong may see reduced investment enthusiasm due to current pricing pressures and non-technical cost reductions [4][29] Grid Sector - New pricing mechanisms for nearby consumption of green electricity have been established, which will protect grid interests and promote cost reductions for users [6][35] - The system operation costs will be charged based on the electricity delivered, allowing for potential savings in electricity costs for high-load enterprises [7][37] - The report highlights that the new pricing structure will benefit wind power and energy storage development, making them key components in the green electricity landscape [8][42] Renewable Energy Assets - The report discusses the acceleration of Real World Assets (RWA) in the distributed solar sector, with significant investments from companies like JinkoSolar and GCL-Poly [10][44] - The RWA framework is expected to enhance liquidity and value reassessment of quality distributed solar assets, benefiting original equity holders [11][47] - The collaboration between LinYuan Energy and Ant Group aims to digitize energy assets, further supporting the RWA initiative [12][48] Green Methanol - A major project for green methanol production has been announced by Goldwind, with a total investment of approximately 18.92 billion CNY, aiming to produce 600,000 tons of green methanol annually [13][49] - The report anticipates a surge in demand for green methanol as multiple projects are set to commence production in the coming years [13][49] - Key suppliers and equipment manufacturers in the green methanol sector are expected to see performance improvements as the market expands [13][49]

Investment Rating - The report maintains a "Positive" investment rating for the utility sector [8] Core Insights - The bidding results for wind and solar energy in Shandong for 2025 show a clear differentiation, with wind energy having a selected volume of 5.967 billion kWh and a clearing price of 0.319 CNY/kWh, while solar energy has a selected volume of 1.248 billion kWh and a clearing price of 0.225 CNY/kWh [2][11] - The new pricing mechanism for grid connection capacity is expected to facilitate the consumption of renewable energy, promoting a win-win situation for the grid, power generation companies, and users [2][11] Summary by Sections Bidding Results - The wind energy projects in Shandong are limited in number but have a large allocated bidding volume, with a rational bidding price close to the upper limit, indicating stable profit expectations [2][11] - The solar energy projects face intense competition, leading to a clearing price that is under pressure, reflecting a more challenging market environment [2][11] Pricing Mechanism - Recent regulatory changes propose a shift to a single capacity-based pricing model for grid connection, which is expected to streamline the pricing mechanism for nearby consumption projects [2][11] - The new pricing structure aims to eliminate additional fees for energy delivered to the grid, thus enhancing the economic viability of renewable energy projects [2][11] Investment Recommendations - The report suggests that the ongoing reforms in the electricity market are revitalizing power operators, with a focus on high-quality development in the renewable energy sector [2][11] - Specific companies recommended for investment include Huaneng International, Datang Power, and China Power, among others, due to their strong positions in the transitioning energy landscape [2][11]

Investment Rating - The report maintains a positive outlook on the power and gas sectors, recommending various companies within these industries for investment [5][14]. Core Insights - The report highlights the competitive results of the electricity pricing mechanism in Shandong, indicating that wind power is favored over solar power, with wind power pricing at 0.319 CNY/kWh and solar at 0.225 CNY/kWh [9][10]. - A new pricing mechanism for nearby consumption of renewable energy has been established, clarifying economic responsibilities and allowing renewable projects to pay for supply reliability [12][13]. - Global gas prices are showing mixed trends, with European and Asian prices rising while U.S. prices are declining, reflecting varying supply and demand dynamics [15][20]. Summary by Sections 1. Electricity: Shandong Pricing Mechanism and New Renewable Energy Policies - Shandong's first competitive pricing results show wind power projects with a total capacity of 3.5911 GW and a mechanism electricity price of 0.319 CNY/kWh, while solar projects have a capacity of 1.265 GW and a price of 0.225 CNY/kWh [9][11]. - The new pricing mechanism for nearby consumption aims to enhance the utilization of renewable energy and reduce the pressure on the power system [12][13]. 2. Gas: Global Price Variations - As of September 12, U.S. Henry Hub spot prices are at $2.94/mmBtu, down 3.61% week-on-week, while European TTF prices are at €32.00/MWh, up 1.27% [15][16]. - The report notes that U.S. gas production remains high despite a slight decline, while European prices are influenced by supply constraints and increased heating demand due to cooler temperatures [15][20]. 3. Weekly Market Review - The gas sector outperformed the Shanghai and Shenzhen 300 index, while the public utilities, power, and environmental sectors underperformed [36]. 4. Company and Industry Dynamics - Recent announcements include the implementation of market-oriented pricing reforms for renewable energy in Jiangxi province, effective from October 2025 [40]. - The report also discusses various company announcements, including operational updates and financial instruments [43]. 5. Key Company Valuation Tables - The report provides valuation metrics for key companies in the public utility sector, highlighting buy and hold recommendations for several firms based on their earnings and price-to-earnings ratios [45][46].

Core Viewpoint - The report from Xingzheng International initiates coverage of Longyuan Power (001289)(00916) with an "Overweight" rating, highlighting short-term performance pressure due to fluctuations in green electricity prices, while maintaining optimism about the company's long-term growth potential driven by offshore wind and large-scale projects [1] Group 1: Company Overview - Longyuan Power is positioned as the wind power business integration platform of the State Energy Group, with a total installed capacity of 43.2 GW as of the end of H1 2025, comprising 31.4 GW of wind power and 11.8 GW of solar power [2] - The company has historically maintained a stable return on equity (ROE) in the range of 8-9%, with controllable declines in electricity prices over recent years [2] - The operating profit per kilowatt-hour for wind power has decreased from 0.24 yuan/kWh in 2017 to 0.20 yuan/kWh in 2024, and is expected to drop to 0.19 yuan/kWh in H1 2025 due to unfavorable wind conditions and price pressures [2] Group 2: Market Position and Growth Potential - Longyuan Power holds a leading position in resource allocation with 31.4 GW of controlled wind power capacity, including approximately 2.2 GW from Jiangsu offshore wind and 0.4 GW from Fujian offshore wind, primarily located in resource-rich areas and load centers [3] - The company has a significant pipeline of offshore wind projects exceeding 5 GW, distributed across Jiangsu, Fujian, and Hainan, which is expected to support profit growth as these projects come online [3] Group 3: Pricing and Policy Environment - The average electricity price for wind power has remained relatively stable, decreasing from 0.49 yuan/kWh in 2017 to 0.47 yuan/kWh in 2024, with expectations for improved pricing dynamics following the issuance of policy document 136 [4] - The acceleration of national subsidy recovery for green electricity companies has been observed since July, with the average trading price of green certificates rising by 35.42% month-on-month to 4.61 yuan per certificate in July [4]