Core Viewpoint - The company is focusing on the salt cavern energy storage sector and is steadily advancing related project developments, which are expected to contribute to sustained revenue growth in the future [1] Project Developments - The Zhangxing Gas Storage Project, co-invested with PetroChina, has completed the gas injection task for 2025, with a total of 295 million cubic meters injected this year, including 184 million cubic meters of cushion gas and 111 million cubic meters of working gas, resulting in a total gas inventory of 356 million cubic meters [1] - The first unit of the 600MW compressed air energy storage project, a joint venture with GuoXin Group, is scheduled to be connected to the grid on July 1, 2025, with the second unit expected to be operational by the end of December 2025, which will further diversify the company's revenue sources in salt cavern energy storage [1] - The company is progressing with the small molecule gas storage center project in collaboration with GuangSteel Gas, currently advancing environmental and safety assessments [1] Research and Development Initiatives - The "Key Technology Research for Large-Scale Hydrogen Storage in Salt Caverns" project, included in Jiangsu Province's frontier technology research plan for 2024, has passed a mid-term review by experts organized by the provincial science and technology department and is being accelerated in collaboration with the Wuhan Institute of Rock and Soil Mechanics [1] - The "Effectiveness Evaluation and Monitoring Technology Research for Special Space CO2 Sequestration" project, approved as a major national science and technology project in December 2024, has completed preliminary work such as site selection and geological evaluation [1] Future Outlook - Salt cavern energy storage is considered a strategic emerging business, and the various projects are at different stages of construction, with future revenues expected to increase as projects are implemented and scaled [1] - The company aims to expedite project construction to achieve early operational effectiveness, thereby enhancing profitability and improving investor returns [1]

Group 1 - The establishment of Zhongyan (Changzhou) Salt Cave Energy Storage Co., Ltd. was recently reported, with a registered capital of 120 million RMB [1] - The company is co-owned by Huaneng International's Jiangsu Energy Development Co., Ltd. and China Salt Group's China Salt Salt Cave Comprehensive Utilization Co., Ltd. [1] - The business scope of the new company includes energy storage technology services [1]

Group 1 - A new company, Zhongyan (Changzhou) Salt Cave Energy Storage Co., Ltd., has been established with a registered capital of 120 million RMB [1] - The legal representative of the new company is Xie Weiwei [1] - The business scope includes energy storage technology services [1] Group 2 - The company is jointly owned by Huaneng International's Jiangsu Energy Development Co., Ltd. and Zhongyan Group's Zhongyan Salt Cave Comprehensive Utilization Co., Ltd. [1]

Summary of Su Yan Jing Shen Conference Call Company Overview - Su Yan Jing Shen is actively advancing multiple energy storage projects, including collaborations with China National Petroleum Corporation (CNPC) and Jiangsu Guoxin, aiming to diversify energy storage methods and enhance overall profitability [2][3] Strategic Goals - The company aims to achieve a rock salt production capacity of 12 million tons, gas storage capacity of 5 billion cubic meters, operating revenue of 20 billion yuan, and tax revenue exceeding 3 billion yuan during the 14th Five-Year Plan period [2][3] Financial Performance - As of the first half of 2025, total assets were 9.99 billion yuan, net assets attributable to shareholders were 6.079 billion yuan, operating revenue was 2.358 billion yuan, and total profit was 415 million yuan, reflecting a year-on-year decline of 28% [2][3] - Earnings per share were 0.4404 yuan, down 28.86% year-on-year [5] Product Sales and Market Dynamics - Calcium chloride sales declined due to reduced domestic and international demand, with a 20% drop in sales volume [6] - The company is expanding into the liquid calcium market and developing new de-icing agents, with liquid calcium having a higher gross margin than solid calcium chloride [7][8] Project Updates - The Zhang Ying gas storage facility has commenced operations, with plans to inject 190 million cubic meters of base gas in 2025, of which 144 million cubic meters have been completed [12] - The project is expected to be completed by the end of the year, with a signed contract for 200 million cubic meters of working gas, anticipating over 100 million yuan in revenue and approximately 10 million yuan in profit [14] Future Projects and Capacity Expansion - The company plans to construct additional gas storage projects, including the Huai'an 10 billion cubic meter storage project and the Yanghuai mining area storage project, targeting a total capacity of 5 billion cubic meters by 2030 [4][22][23] - The Zhang Ying storage facility is strategically located in a high-demand area, with Jiangsu's natural gas consumption projected at 40 billion cubic meters in 2024 [4][17] Revenue and Cost Structure - The revenue model includes injection fees, extraction fees, and storage fees, with expected annual income from the working gas contract exceeding 100 million yuan [14] - The cost of natural gas storage is approximately 0.65 yuan per cubic meter, with downstream customers able to bear the pricing [26] Research and Development - R&D expenses are typically higher in the second quarter due to project initiation timelines, with overall annual R&D costs remaining stable [30] Investment and Returns - The investment in the compressed air energy storage project is expected to yield returns reflected in next year's financial statements, with projected annual equity investment returns of approximately 70 million yuan [31] Conclusion - Su Yan Jing Shen is positioned to enhance its market presence and profitability through strategic projects, diversification of product offerings, and a focus on innovative energy storage solutions, despite facing challenges in sales and profit margins.

Core Viewpoint - Su Yan Jingshen is facing market challenges but is implementing lean management and technological improvements to enhance efficiency and reduce costs, while also focusing on the development of new growth areas in the salt cavern comprehensive utilization industry. Financial Performance - In the first half of 2025, the company achieved total revenue of 2.358 billion yuan and a net profit of 344 million yuan, with basic earnings per share of 0.44 yuan [1] - The total profit decreased by 28.40% year-on-year to 416 million yuan, while the net cash flow from operating activities was 156 million yuan [1] - The total assets reached 9.990 billion yuan, with accounts receivable amounting to 328 million yuan [1] Cost Management and Efficiency - The company reduced maintenance costs by 31.96 million yuan and saved 1.59 million yuan in electricity costs through optimization of boiler desulfurization pump operations [1] - The average procurement prices for coal, coke, and stone decreased by 17.3%, 24.32%, and 16.73% respectively [1] - The cost per ton of products from the subsidiary Ruihong Salt Industry decreased by 27.41 yuan year-on-year [1] Strategic Development - Su Yan Jingshen is actively promoting the salt cavern comprehensive utilization industry, with significant mining rights in Huai'an, including the Yanghuai salt mine with over 3 billion tons of reserves [2] - The Zhangxing gas storage project has commenced production, with a cumulative injection of 34.35 million cubic meters of gas [2] - The company is collaborating with Jiangsu Guoxin to build a 600MW salt cavern compressed air energy storage project, expected to be operational by July 2025 [2] Innovation and R&D - The company is committed to technological innovation, with multiple provincial-level R&D platforms and ongoing applications for high-tech enterprise recognition and provincial key laboratory establishment [2] - New product developments include five types of refined rock salt and instant snowflake salt, along with several technological achievements [2] - The company has filed 13 patent applications and received 21 patents, focusing on key technologies for salt cavern hydrogen and helium storage [2] Future Outlook - Over the next 3 to 5 years, the company aims to become a new manufacturing and renewable energy enterprise, with a projected net profit exceeding 3 billion yuan [3] - Plans include increasing salt chemical product capacity to over 10 million tons and developing a gas storage capacity of 10 billion cubic meters [3] - The Zhangxing gas storage project is expected to be fully completed by 2026, with a total design capacity of 3.126 billion cubic meters by 2030 [3] - The company has unveiled a technology center for original technology in salt cavern gas storage, addressing global challenges in constructing large gas storage facilities [3]

Core Insights - The Su Yan Jing Shen Academy's achievements in deep underground energy storage were presented at a conference, marking a significant advancement in China's energy storage capabilities [1] - The development of the "Chinese solution" for salt cavern gas storage has transitioned the traditional salt chemical industry towards a new salt cavern energy storage industry [1] - The company aims to accelerate the restructuring of the "salt + energy storage" industry and foster innovation in technology and standards [1] Group 1 - The Su Yan Jing Shen Academy's deep underground energy storage results were developed over more than 10 years and represent a breakthrough in the field [1] - The conference included participation from experts, scholars, and government officials, highlighting the collaborative effort in advancing this technology [1] - The chairman of the group emphasized the importance of collaborative research and innovation to achieve original results and promote the industrialization of gas storage [1] Group 2 - The company is focused on building a comprehensive innovation ecosystem that includes basic research, technological breakthroughs, and talent support [1] - There is a goal to accelerate the industrialization and scaling of gas storage facilities, targeting a hundred billion yuan gas storage industry [1] - The initiative aims to enhance the efficiency of gas storage and contribute to the overall energy transition in China [1]

Core Insights - The "Large-Scale Salt Cavern Hydrogen Storage" project marks a significant step in China's hydrogen storage capabilities, initiated by China Salt Group and Tsinghua University in Changzhou [1][3][4] - The project aims to develop a complete technology system for salt cavern hydrogen storage, enhancing the hydrogen energy industry's safety, integrity, and autonomy [2][3][9] Project Overview - The project is part of a national key research and development plan, involving multiple institutions including China University of Geosciences and the Chinese Academy of Sciences [2] - Salt caverns are man-made underground cavities formed by dissolving rock salt, providing ideal conditions for storing gases like hydrogen due to their excellent sealing and stability [2][3] Technical Aspects - The project will create two new salt caverns with hydrogen injection and extraction wells, focusing on testing hydrogen storage performance [4] - Salt cavern hydrogen storage is considered the best method for large-scale underground hydrogen storage, with individual caverns capable of storing between 200,000 to 400,000 cubic meters of hydrogen [3][4] Regional Advantages - Jiangsu province, particularly Changzhou, has a rich history in salt cavern utilization, making it an ideal location for this project due to its abundant salt resources and established infrastructure [4][5][6] - The salt layer in Changzhou is thick and of high quality, providing a stable environment for hydrogen storage [5][6] Safety Measures - The project incorporates a unique constant pressure storage method to mitigate risks associated with hydrogen's flammability and explosiveness, ensuring safe storage conditions [7][8] - A multi-dimensional safety defense system is being established throughout the project's design, construction, and operational phases [7] Future Implications - As technology advances, salt cavern hydrogen storage is expected to lower storage costs and facilitate the expansion of hydrogen energy systems across China [8] - The project aims to create a comprehensive technology standard for hydrogen storage, providing a model for other regions in the country [9]

Core Viewpoint - Huayuan Securities issued a report on July 31, giving a "buy" rating to Su Yan Jingshen (603299.SH, latest price: 10.48 yuan) based on several positive factors related to the company's performance and market position [2] Group 1: Company Strengths - The company is a leading player in the salt industry, focusing on "salt + energy storage," characterized by low debt and high cash flow, resulting in stable profitability [2] - The integrated development of salt, alkali, and calcium products allows for stable pricing and potential growth in salt product sales [2] - Jiangsu province has the highest natural gas demand in the country, with strong seasonal peak-shaving storage needs [2] Group 2: Growth Opportunities - The rapid development of salt cavern gas storage business is expected to lead to increased storage capacity, positioning the company for a sustained growth phase [2] - The company is advancing projects in compressed air energy storage and small molecule gas storage, continuously exploring the utilization of salt cavern resources [2]

Investment Rating - The investment rating for the company is "Buy" (首次) [5] Core Views - The company is a leading player in the salt chemical industry in East China, focusing on "salt + energy storage," with low debt and stable cash flow [5] - The core business includes salt and salt chemical products, contributing 85% of revenue gross profit, benefiting from stable product pricing and declining coal prices [5] - The company is actively developing salt cavern storage for natural gas and compressed air, which are expected to significantly contribute to performance in the next five years [5][6] - The company plans to increase production capacity significantly by 2030, with a projected total capacity of 12 million tons for salt and salt chemical products [5] - The company is also expanding into compressed air energy storage and small molecule gas storage projects, enhancing its growth potential [8] Summary by Sections Market Performance - The closing price as of July 31, 2025, is 10.48 yuan, with a market capitalization of 8,191.78 million yuan [3] Financial Data - The company has a total share capital of 781.66 million shares and a debt-to-asset ratio of 37.23% [3] - The net asset value per share is 7.97 yuan [3] Profit Forecast and Valuation - Revenue projections for 2023 to 2027 are 5,682 million, 5,344 million, 5,560 million, 6,728 million, and 7,727 million yuan respectively, with a growth rate of 4.03% in 2025 [7] - The net profit attributable to shareholders is forecasted to be 738 million, 769 million, 705 million, 917 million, and 1,130 million yuan from 2023 to 2027, with a significant increase expected in 2026 and 2027 [7] - The price-to-earnings ratio (P/E) is projected to decrease from 11.09 in 2023 to 7.25 in 2027, indicating potential for valuation growth [7] Business Development - The company is planning to invest up to 1.8 billion yuan in developing a brine salt project, which is expected to increase solid salt production by 3 million tons per year [5] - The company is also pursuing partnerships for compressed air energy storage and small molecule gas storage projects, indicating a strategic expansion into new business areas [8]

Group 1 - The company held a performance briefing on May 22, 2025, to discuss its 2024 annual and Q1 2025 results, with key executives present for investor interaction [1] - The company reported a revenue of 5.344 billion yuan for 2024, a decrease of 5.95% year-on-year, while net profit attributable to shareholders increased by 4.15% to 769 million yuan [3][4] - The company aims to enhance its long-term core competitiveness through a strategic transformation towards a "salt + energy storage" industry model [3] Group 2 - The investment in the air energy storage project by Jiangsu Guoxin Su Yan Storage Power Co., Ltd. is approximately 3.74 billion yuan, with a planned capacity of 300MW for the first phase, expected to commence production in July 2025 [2] - The company maintains a cash dividend payout ratio of 45.04% for 2024, with cumulative cash dividends of 960 million yuan from 2022 to 2024, indicating a commitment to shareholder returns [4] - The company is focusing on the development of its "traditional, emerging, and future" industries, particularly in the salt cavern energy storage sector, to create new business opportunities and enhance profitability [3]