Zhejiang Xinzhonggang Thermal Power (SH:605162) Zheng Quan Zhi Xing·2025-06-27 16:49Core Viewpoint - The credit rating report for Zhejiang Xinzhonggang Thermal Power Co., Ltd. indicates a stable outlook with an AA- rating, reflecting the company's natural monopoly in the region and stable cooperation with downstream customers [3][4]. Company Overview - Zhejiang Xinzhonggang Thermal Power Co., Ltd. operates as a combined heat and power (CHP) enterprise, maintaining a significant market position in the Shengzhou Economic Development Zone [4][5]. - The company has a stable customer base, primarily supplying steam to over 150 industrial users in the Shengzhou area, and sells electricity directly to the State Grid [14][16]. Financial Performance - The company's total debt as of March 2025 is reported at 3.87 billion, with total equity at 13.34 billion [3]. - Revenue from the thermal power business decreased by 9.54% in 2024 compared to 2023, attributed to a slight decline in demand from industrial enterprises in the region [5][15]. - Despite a decrease in revenue, the company experienced an increase in gross profit margin due to a reduction in coal procurement prices, which decreased by 12.88% [16][19]. Operational Highlights - The company has implemented high-parameter back-pressure units and new circulating fluidized bed boilers, achieving a comprehensive thermal efficiency exceeding 80% in 2024 [4][19]. - The newly added energy storage business has shown strong profitability, with a gross margin of 47.55% in its first year of operation [4][5]. Market Environment - The thermal power industry is characterized by high policy and capital barriers, with a natural monopoly in regions where early entrants have established their operations [10][11]. - The demand for centralized heating is growing, although the growth rate has slowed in recent years, with the total area of centralized heating reaching 11.549 billion square meters by the end of 2023 [12][13]. Future Outlook - The company is expected to continue benefiting from its stable customer relationships and the profitability of its energy storage and compressed air businesses [5][6]. - Ongoing capital expenditure pressures are anticipated due to several projects under construction, with a total investment of 2.57 billion planned [20].