Core Viewpoint - Harbin Jiuzhou Group Co., Ltd. maintains a stable long-term credit rating of AA- for its main entity and the "Jiuzhou Convertible Bond 2" [1][4] Company Overview - The company specializes in intelligent equipment manufacturing, renewable energy, and comprehensive smart energy businesses [4][14] - As of March 2025, the company has a total asset of 69.85 billion yuan and equity of 24.72 billion yuan [14] Financial Performance - In 2024, the company reported a total revenue of 14.81 billion yuan, but incurred a net loss of 4.97 billion yuan due to significant impairment losses on biomass fixed assets [6][14] - The company’s cash flow from operating activities was negative at -0.33 billion yuan in Q1 2025, indicating liquidity challenges [13][14] Business Growth - The company’s renewable energy installed capacity increased to 704.60 MW by the end of 2024, with a total of 834.75 MW including controlled and affiliated power stations [17][21] - The electrical and related equipment business saw a significant revenue increase of 40.72% in 2024 due to a surge in order volume [4][6] Risks and Challenges - Non-operating losses significantly impacted operating profits, with a total impairment loss of 4.57 billion yuan in 2024 [6][10] - The company faces high asset restriction ratios, with restricted assets amounting to 34.59 billion yuan, representing 49.35% of total assets [6][10] Industry Analysis - The renewable energy sector in China is experiencing rapid growth, with investments in clean energy surpassing traditional coal-fired power generation for the first time [16] - The electricity supply-demand balance is expected to remain tight in 2025, with ongoing pressures from high fuel prices affecting thermal power generation [16][18] Future Outlook - If the company successfully completes its ongoing power station projects and secures funding for future developments, its operational performance may improve [5][9] - The successful conversion of "Jiuzhou Convertible Bond 2" could enhance the company's capital strength and reduce debt burden [5][9]

Company Overview - Jiuzhou Group, founded in 1993, focuses on smart distribution networks and energy sectors, and is a leading provider of new power and energy infrastructure [1] - The company is a national key high-tech enterprise and was successfully listed on the Chinese Growth Enterprise Market in 2010 (stock code: 300040) [1] - Jiuzhou Group has established three core business segments: smart distribution networks, new energy, and comprehensive energy services, supported by over 40 subsidiaries across various provinces [1][2] Business Development - Since 2015, the company has transitioned from a pure equipment supplier to a "manufacturing + service" model, forming a modern intelligent manufacturing pattern [2] - The company has over 200 patents and its products are distributed in more than 70 countries and regions [2] - As of December 2024, Jiuzhou Group has constructed, controlled, and held new energy power station capacity exceeding 2.7 GW, with an additional 1 GW in projects under construction [2] Financial Performance - The smart distribution network business is projected to exceed 800 million CNY in orders for 2024, with a year-on-year growth of over 30% [2] - The gross margin for self-branded products is approximately 20%, while the net margin is around 3% [2] New Energy Projects - The company plans to maintain its total equity capacity between 1.5 GW and 2 GW, focusing on long-term holdings while gradually selling older projects [3] - Current projects under construction and those with secured indicators exceed 1 GW, with an additional 2 GW to 3 GW in the development phase [4] Biomass Sector Challenges - The biomass power generation sector faced issues in 2024, including fuel shortages and cash flow problems, leading to a fixed asset impairment loss of 422 million CNY [5] - The company will not initiate new biomass projects but will optimize existing ones and seek buyers for current assets [5] Government Subsidies - The company has approximately 1 billion CNY in government subsidy receivables, with a typical delay of 2-3 years for payments [6] Financing and Shareholder Actions - The financing costs for new energy projects range from 2.8% to 3.5%, while working capital loans are between 3.0% and 3.5% [8] - The major shareholder's reduction in holdings is nearing completion, with minimal impact expected on the secondary market [8]

Core Insights - The successful installation of the three-remote switch on the 10kV Xintun II line enhances the reliability of power supply in the Jianyang Economic Development Zone, supporting high-quality economic development [1] - The 110kV Jiangkang substation, set to be operational in 2024, will serve as a dedicated power source for the Jianyang Economic Development Zone, meeting the high reliability demands of the industrial upgrade [3] - The company has implemented a comprehensive strategy for network framework improvement, achieving a significant reduction in power outage incidents to an average of 2 minutes per year [3][4] - The FA (Fault Automation) technology has revolutionized fault handling, reducing isolation and restoration times from hours to seconds, thereby enhancing the overall reliability of the power distribution network [6] Group 1 - The successful installation of the three-remote switch on the 10kV Xintun II line marks the completion of the high-standard FA feeder demonstration station at Jiangkang substation, providing reliable power support for the Jianyang Economic Development Zone [1] - The company has achieved full coverage of high-standard FA feeders, with a minimum self-healing rate exceeding 50%, transitioning from a reactive repair model to a proactive self-healing approach [3] - The company has completed 37 construction demands and established 21 high-standard feeders, ensuring effective implementation of FA functions [4] Group 2 - The FA feeder automation technology enables real-time monitoring and rapid fault isolation, with a focus on maintaining a stable operation of the FA system through regular testing and maintenance [6] - The company has implemented innovative management practices to reduce fault occurrence rates in high-risk areas, contributing valuable experience to the FA construction in complex network structures [6] - Future plans include optimizing the layout of three-remote terminals and enhancing the application of full-stop full-transfer technology to continuously empower industrial upgrades and improve living standards [7]

Core Viewpoint - Jiuzhou Group is focusing on the smart distribution network and network energy sectors, positioning itself as a leading provider of new power and energy infrastructure, with a dual-engine business model combining renewable energy and smart equipment manufacturing [1][2]. Group 1: Business Overview - Jiuzhou Group has established three main business segments: smart equipment manufacturing, renewable energy generation, and comprehensive smart energy [1]. - The company has a significant global presence, with products covering over 70 countries and regions, and has a strong integration advantage across the supply chain [1]. - As of December 2024, Jiuzhou Group will have a cumulative installed capacity of over 2.7 GW in renewable energy power stations, with an additional 1 GW in projects under construction and over 2 GW in development [1]. Group 2: Strategic Initiatives - The management views enhancing the performance of the smart equipment manufacturing segment as a key focus for future growth, aiming to improve capacity utilization and gross margins through scale effects [2]. - A new sales team targeting large clients is being established in Beijing, with plans for an overseas sales team starting in Q3 2024 [2]. - Jiuzhou Group is leveraging partnerships within the energy sector to expand its equipment sales market and drive growth in the transmission and distribution equipment business [2]. Group 3: Market Performance - The order value for the smart distribution network business exceeded 800 million yuan in 2024, representing a year-on-year increase of over 30% [3]. - The company has achieved a historical high in bid amounts, exceeding 260 million yuan in Q1 2025 [3]. - Jiuzhou Group's wind power assets reached an installed capacity of 246 MW by the end of 2024, a year-on-year increase of 100 MW, while solar power assets remained stable at 298.6 MW [3]. Group 4: Project Development - Jiuzhou Group is engaging in equity cooperation for wind and solar power projects with state-owned enterprises, with plans to sell 100% equity of newly connected projects to realize resource and equipment value [4]. - The expected internal rate of return for the decentralized wind + clean energy heating projects is over 10%, benefiting from the advantages of decentralized wind power and decreasing construction costs [4]. Group 5: Market Potential - The potential market for decentralized wind + clean energy heating in Northeast China is substantial, with nearly 300 county-level administrative units and over 3,000 towns [5]. - Jiuzhou Group aims to optimize and adjust its business model based on operational results after launching its first project in Heilongjiang Province, with plans to replicate this model across Northeast and North China [5].

Company Overview - Jiuzhou Group, founded in 1993, focuses on smart distribution networks and energy sectors, recognized as a leading provider of new power and energy infrastructure [2] - The company is a national key high-tech enterprise and was successfully listed on the Chinese Growth Enterprise Market in 2010 (stock code: 300040) [2] - Jiuzhou Group offers competitive and reliable products and solutions across the entire value chain of power and energy applications, collaborating with ecological partners to create value for customers [2] Business Segments - The company has established three core business segments: smart distribution networks, new energy, and comprehensive energy services, managed by three business groups with over 40 subsidiaries across various provinces [2] - Jiuzhou Group has built a robust operational support platform for research, manufacturing, and marketing, covering 30 provinces and regions [2] Market Position and Achievements - Jiuzhou Group is a key supplier for multiple provincial companies of the State Grid, with products applied in thousands of domestic and international infrastructure projects [2] - The company has received numerous accolades, including being listed among the top 100 private technology enterprises in China and the top 500 in the energy sector [2] Financial Performance and Growth Targets - The company aims for a revenue growth target of 30% for the smart distribution network business in 2025, driven by a focus on large group clients [14] - The new energy generation business targets a 10% revenue growth, supported by ongoing project integrations [14] - The comprehensive energy business also aims for a 10% revenue increase, with projects like distributed wind power and zero-carbon industrial parks [14] Order and Revenue Insights - The smart distribution network business is projected to achieve an order amount exceeding 800 million yuan in 2024, reflecting a year-on-year growth of over 30% [3] - As of Q1 2025, the company has secured contracts worth over 260 million yuan, marking a historical high for the same period [4] International Expansion - The company is building an overseas sales team and establishing direct export capabilities, focusing on markets such as Russia, ASEAN countries, and regions involved in the Belt and Road Initiative [5] Renewable Energy Projects - By the end of 2024, Jiuzhou Group's wind power assets will have a capacity of 246 MW, an increase of 100 MW from the previous year, while solar power capacity remains at 298.6 MW [6][7] - The company has a project reserve of over 1 GW and is developing an additional 2 GW to 3 GW of projects, ensuring sustained growth in the renewable energy sector [13] Challenges and Strategic Adjustments - The biomass power generation sector faced challenges in 2024, leading to a significant impairment loss of 422 million yuan due to operational inefficiencies and market fluctuations [10] - The company plans to adjust its biomass project strategy by enhancing raw material supply stability and optimizing operational processes to improve profitability [10][11] Future Outlook - Jiuzhou Group is optimistic about future growth in the power equipment business, anticipating a new cycle of investment in the distribution network sector driven by national policies and clean energy projects [4]