Summary of the Conference Call Company and Industry - **Company**: Tongli Sheng (同利生) - **Industry**: Renewable Energy, specifically focusing on new energy and energy storage projects Key Points and Arguments Financial Performance - **Revenue**: The company reported a slight decline in revenue year-on-year, primarily due to the high base from the previous year in the new energy sector [2] - **Net Profit**: The net profit attributable to shareholders decreased by 8.95%, with traditional business margins significantly dropping [2] - **New Energy Growth**: Despite the overall revenue decline, the new energy sector showed strong growth, with net profit reaching 296 million yuan in the first three quarters, compared to 267 million yuan for the entire previous year [2][8] Project Updates - **Ongoing Projects**: The company has several ongoing projects, including a 920 MW large-scale storage project in Chengde, which is expected to generate stable income through capacity leasing [6][30] - **New Projects**: New projects in Tianjin and Guangdong are in the pipeline, with a focus on energy storage and wind power [7][30] - **International Expansion**: The company is actively pursuing projects overseas, including two significant projects in Australia, totaling 3 GW [36][39] Strategic Direction - **Board Restructuring**: The company has applied for a board expansion and name change to better reflect its focus on new energy, indicating a strategic shift since its acquisition in 2021 [3] - **Cash Flow Focus**: The company emphasizes maintaining positive cash flow and profitability for each project, distinguishing itself from competitors who may prioritize project quantity over quality [9][33][44] - **Long-term Vision**: The goal is to rank among the top ten companies in terms of profit within the next three to five years, with a focus on sustainable growth rather than aggressive expansion [44][45] Market Dynamics - **Green Electricity Supply**: The company is working on green electricity direct supply projects, aiming to reduce costs for data centers, with potential prices between 0.3 to 0.4 yuan per kWh [18][19] - **Challenges in Resource Acquisition**: The company faces challenges in securing quality renewable resources, particularly in regions like Qingyang, which affects project timelines [18][21] Future Outlook - **Profit Growth**: The company anticipates a profit growth rate of over 20% annually, driven by both domestic and international projects [45] - **Sustainable Development**: The focus remains on developing high-quality, long-term assets rather than leveraging debt for rapid expansion [44] Other Important Information - **Technological Advancements**: The company is investing in technology to ensure the reliability and stability of its energy supply systems, which is crucial for maintaining competitive pricing [20][25] - **Market Positioning**: The company aims to differentiate itself by ensuring that all projects are financially viable and contribute positively to cash flow, rather than simply increasing project numbers [33][41]

Group 1: Report's Investment Rating - There is no information about the industry investment rating provided in the report. Group 2: Core Views of the Report - The domestic independent energy storage has entered a rapid development stage, gradually taking over from new - energy - paired storage and becoming a new driving force for the growth of the energy storage market. Its revenue comes from power spot market arbitrage, auxiliary services, and capacity - based electricity price compensation [4]. - The capacity - based electricity price compensation presents in three ways: discharge - based compensation (e.g., Inner Mongolia, with an IRR of up to 10% and capacity compensation accounting for nearly 50% of income in the first ten years), power - and - duration - based compensation (e.g., Gansu, with an IRR of up to 14% and capacity compensation accounting for 31% of income), and capacity leasing (e.g., Yunnan, with an IRR of up to 8% and capacity leasing accounting for 72% of income). In these three modes, the IRR of representative provinces can meet the requirements of central and local state - owned enterprises [4]. - The domestic energy storage will maintain high growth. Reasons include: the winning bid scale has increased beyond expectations (the total winning bid volume of energy storage projects from January to September 2025 reached 318.4GWh, a year - on - year increase of 190%); policy support has been continuously strengthened (the installed capacity of new - type energy storage is expected to reach over 180 million kilowatts by the end of 2027, and the capacity - based electricity price mechanism in various provinces is expected to be further promoted); and the power marketization has accelerated (the auxiliary service market is gradually improving, and the full entry of new energy into the market will further widen the peak - valley price difference) [4]. - It is estimated that the domestic installed capacity will reach 122GWh in 2025, a year - on - year increase of 14%; the new installed capacity in 2026 will be 159GWh, a year - on - year increase of 30%. Overseas, the traditional markets of the US and Europe are growing steadily, and emerging countries such as the Middle East, Australia, and India are booming. It is expected that the global new energy storage installed capacity will be 256GWh in 2025, a year - on - year increase of 35%, and 351GWh in 2026, a year - on - year increase of 37% [4]. - Due to the US "Build Back Better" Act and optimistic expectations from domestic power market policies such as capacity subsidies, the inventory coefficient for energy storage cells is raised to 2.1. It is expected that the shipment volume will be 520GWh in 2025, a year - on - year increase of 56%, and 698GWh in 2026, a year - on - year increase of 34% [4]. Group 3: Summary According to Relevant Catalogs Independent Energy Storage Development Status - **Introduction**: Independent energy storage is a storage facility independent of the power generation and user sides, participating in the power market independently. Its application scenarios include power peak shaving, frequency regulation, and grid black - start. The system mainly consists of battery packs, battery management systems, energy management systems, and power conversion systems [9]. - **Development Process**: Driven by mandatory energy - storage - pairing policies, independent energy storage developed rapidly. After the implementation of Document No. 136, new - energy - paired storage gradually withdrew, and independent energy storage has dominated the bidding market since February this year [11]. - **Technology, Owners, and Regional Distribution**: Lithium - ion batteries dominate the independent energy storage market, with a 95% installed - capacity share as of the end of June 2025. The development owners are mainly central and local state - owned energy enterprises, and some private new - energy companies are also entering the field. Shandong, Jiangsu, Ningxia, and Inner Mongolia have installed capacities exceeding 10GWh, and the development depends on local policies and market mechanisms [16]. Independent Energy Storage Profit Model and Revenue Calculation - **Profit Model - Price Difference Arbitrage**: With the increase in new - energy installation and the full entry of new energy into the market, the peak - valley price difference in the power spot market has widened, and energy storage can achieve arbitrage by charging at low - price times and discharging at high - price times. Location is crucial for arbitrage revenue [19]. - **Profit Model - Auxiliary Services**: The "Special Action Plan for the Large - scale Construction of New - type Energy Storage" encourages energy storage to participate in the auxiliary service market, mainly the frequency - regulation market at present. Different provinces have different price - setting mechanisms for frequency regulation [22]. - **Profit Model - Capacity - Based Electricity Price**: The policy promotes the improvement of the capacity - based electricity price mechanism. Different provinces have different compensation standards, presenting in three main compensation modes [23]. - **Discharge - Based Compensation**: Inner Mongolia and Xinjiang adopt this mode. In Inner Mongolia, the compensation standard is 0.35 yuan/kWh for projects started and completed before June 30, with a 10 - year subsidy period. Without considering auxiliary service income, the IRR can reach 10% [25]. - **Power - and - Duration - Based Compensation**: Most provinces with capacity - based electricity price policies use this mode. Taking Gansu as an example, with the "same compensation for thermal and energy storage" mechanism, the IRR of independent energy - storage projects can reach 13.7% [27]. - **Capacity Leasing Model**: Mainly implemented in Yunnan, this model requires new - energy projects to have a certain energy - storage capacity or pay capacity fees. The estimated IRR of projects under this mechanism is 7.8% [29]. Energy Storage Demand Outlook - **Domestic**: From January to August, the new installed capacity of domestic energy storage was 28.69GW/75.94GWh, a year - on - year increase of 41.5%. It is estimated that the installed capacity will reach 122GWh in 2025 and 159GWh in 2026. The growth is driven by the over - expected increase in winning bid scale, continuous strengthening of policy support, and acceleration of power marketization [33]. - **Global**: The domestic demand is rising, and traditional and emerging overseas markets are also growing. It is expected that the global new energy - storage installed capacity will be 256GWh in 2025 and 351GWh in 2026. The energy - storage cell shipment volume is expected to be 520GWh in 2025 and 698GWh in 2026 [39].

Group 1: New Energy Industry - The National Development and Reform Commission and the National Energy Administration have issued a plan for the large-scale construction of new energy storage, aiming for an installed capacity of over 180GW by 2027, with expectations that actual installations may exceed this lower limit [1] - Following the end of the rush for new energy installations in May, domestic storage demand remains strong, with August seeing a record high of 25.8GW/69.4GWh in bidding for energy storage projects [1] - Future revenue sources for energy storage will include participation in the energy market, auxiliary service market, and capacity pricing mechanisms, which are expected to enhance the profitability of energy storage [1] Group 2: Battery Industry - In August, the installed capacity of power batteries in China reached 62.5GWh, reflecting a year-on-year increase of 32.4% and a month-on-month increase of 11.9% [2] - The first half of 2025 saw significant growth in energy storage battery shipments, with global energy storage market cell shipments totaling 240.2GWh, a year-on-year increase of 106.1% [2] - Major battery companies are initiating new rounds of capacity expansion, with companies like CATL starting projects in multiple locations, expected to lead to concentrated capacity release by 2026 [2] Group 3: Stock Performance - Notable stock price increases were observed in major battery companies from August 11 to September 11, with CATL, EVE Energy, Guoxuan High-Tech, and Zhongxin Innovation seeing price increases of 22.4%, 63.4%, 61.7%, and 35.6% respectively [3] - The primary drivers for these stock price increases include sustained high demand for energy storage orders and advancements in solid-state battery research and development [3][5] - Solid-state batteries are transitioning from laboratory testing to mass production validation, with emerging applications in low-altitude flight, robotics, and AI creating new market opportunities [3][5]

Summary of Key Points from the Conference Call Industry Overview - The energy storage market is experiencing high growth due to increased market-driven storage demand and the removal of mandatory storage policies, leading to a recognition of storage's value [1][2] - The Chinese energy storage market is expected to exceed 200 GWh by 2026, driven by the increasing share of wind and solar power generation [1][5] Company Performance - Haibo's performance is notable, with a shipment of 9 GWh in the first half of 2025 and an expected increase to over 20 GWh in the second half, indicating a growth rate of over 100% [2][7] - Yiwai Lithium Energy is projected to grow nearly 50% in the second half of 2025, operating at full capacity [1][2] - Haibo's profit for Q1 was between 60 million to 90 million yuan, increasing to 220 million yuan in Q2, with an expected profit of 350 million yuan in Q3 [1][13] Market Dynamics - The profitability model for energy storage is changing significantly, with market-based trading reducing electricity prices during peak output periods, allowing for profit through spot trading [1][6] - Capacity subsidies from the government are encouraging many provinces to actively promote energy storage, with Inner Mongolia's loan yield reaching as high as 18% [1][9] Pricing Trends - The price range for energy storage systems and components is wide, with domestic low-end products priced at 0.26 yuan and high-end products at over 0.5 yuan, while overseas high-end products exceed 0.6 yuan [1][12] - The competitive landscape has improved, with manufacturers operating at full capacity and beginning to raise prices [1][12] Future Outlook - The future of the Chinese energy storage market is optimistic, with expectations of significant growth in the coming years, particularly as the share of wind and solar power increases [1][5][10] - Yiwai is expected to become a major supplier in the energy storage cell market, with a projected production of 120 GWh in 2026 [1][15] - Sunshine Power is anticipated to achieve a net profit of 14 billion yuan in 2025, with further growth expected in 2026 [1][16] Investment Recommendations - Key companies to watch include major storage firms like Shangneng Electric and Sunshine Power, as well as household storage companies like Airo and Deye, which are expected to see significant price and volume increases [1][24]