March 2026 1 Business Highlights Core profit reached RMB6.74 bn，gross profit share of IE and smart home businesses reached 41%, an increase of 2.3 percentage points yoy Content Retail gas sales volume increased by 1.5% yoy to 26.61 bn m³ with the newly installed designed daily capacity of 13.44 mn m³ for C/I customers, and newly developed 1.38 mn residential household customers Gross profit of IE business increased by 5.3% yoy to RMB2.34 bn, newly installed photovoltaic capacity increased by 167.4% yoy to 6 ...

Summary of Conference Call Notes Company Overview - The company discussed its performance and outlook for 2025 and 2026, focusing on various business segments including coal, wind, and solar energy projects in Europe and Asia. Key Points Industry and Company Performance - **2025 Profit Impact**: Profit is expected to decline due to a project breakeven impact, but the Croatian wind power project is projected to generate approximately 240 million RMB, a 30% increase year-on-year. The decline in overall profit is expected to narrow compared to the first three quarters of 2025 [2][3]. - **Mongolian Coking Coal Business**: The target sales volume for 2026 is set at 5 million tons, with long-term agreements extended to the second half of 2027. The pricing mechanism is stable, and cost adjustments lag behind sales by one quarter [2][3]. - **Croatian Wind Power Project**: Expected to benefit from rising European electricity prices (approximately 12 Euro cents/kWh, a year-on-year increase of 20%-30%) in 2026, with profits anticipated to significantly exceed 2025 levels [2][3]. - **Bangladesh Coal Power Plant**: Aiming for full-capacity commercial operation in the first half of 2026, which could contribute approximately 100 million USD in annual revenue, with the company holding a 50% stake [2][3]. - **Bosnia Solar Project**: A 125 MW solar project is expected to be completed in Q3 2026 and contribute 35-40 million RMB annually, aiding the formation of a European power operation matrix [2][3]. Management Changes - Recent executive changes are described as normal adjustments, with the new chairman previously serving as the chairman of Northern Mining, expected to enhance collaboration with Northern Mining and Zhenhua Petroleum in Africa and Southeast Asia [2][9]. Sales and Pricing Mechanism - The Mongolian coking coal project provides a full-chain investment and service model, with procurement prices adjusted quarterly based on various indices. The sales volume for 2024 was 5.3 million tons, with a projected 4.6 million tons for 2025 due to price pressures [4][5]. European Power Operations - The company views Croatia, Bosnia, Hungary, Romania, and future Ukraine as a cohesive market. The Croatian wind project began operations in 2021, with electricity prices significantly higher than initial projections due to geopolitical factors [6][7]. - The company aims to ensure an annual electricity generation of 440-500 million kWh in 2026, with expectations of increased profitability from the Croatian project compared to 2025 [6][7]. Future Projects and Opportunities - The company is focused on expanding its portfolio of small-scale renewable energy projects in Europe, including storage, waste-to-energy, wind, and solar, to create a stable revenue stream [6][7]. - The Bangladesh coal power project is expected to generate an annual revenue of approximately 100 million USD, with the company’s share contributing around 50 million USD to its financials [7][8]. Middle East Operations - The company operates in Iraq, UAE, and Egypt, primarily providing engineering services for oil fields and infrastructure projects. Current regional conflicts have not significantly impacted operations [8]. Strategic Outlook - The company is optimistic about future asset injections and collaborations with Northern Mining and Zhenhua Petroleum, focusing on enhancing operational synergies [9]. Additional Important Information - The company is monitoring the potential impacts of new government policies in Bangladesh on existing agreements, but expects minimal changes due to the established nature of similar contracts [8][9].

Investment Rating - The investment rating for the company is "Buy" and is maintained [10]. Core Insights - The company reported a total profit attributable to shareholders of HKD 14.519 billion for 2025, representing a year-on-year increase of 0.9% from HKD 14.388 billion in 2024 [7]. - The core profit from the pure thermal power business (excluding coal business) reached HKD 7.336 billion, a significant year-on-year growth of 79.8% [2]. - The thermal power segment achieved a core profit of HKD 7.639 billion, reflecting a year-on-year increase of 64.68% despite challenges in the coal production business [2]. - The renewable energy segment faced pressure, with a core profit of HKD 7.604 billion, down 17.60% year-on-year due to reduced utilization hours and declining electricity prices [2]. Summary by Relevant Sections Financial Performance - The company's thermal power plants sold 157.8 billion kWh of electricity in 2025, a year-on-year increase of 1.30% [11]. - The average on-grid electricity price for coal-fired power plants decreased by approximately HKD 0.028 per kWh to HKD 0.386 per kWh, leading to a 4.25% decline in electricity sales revenue to HKD 68.842 billion [11]. - The average coal price for the company's coal-fired power plants fell by 13.4% to HKD 798.6 per ton, contributing to a 12.26% reduction in fuel costs [11]. Renewable Energy Business - The company added 13.625 million kW of new renewable energy capacity in 2025, with wind and solar power capacity reaching 29.076 million kW and 15.335 million kW, respectively, marking year-on-year growth of 19.59% and 62.57% [11]. - Despite the increase in installed capacity, the utilization hours for wind and solar power decreased, impacting revenue and profits [11]. Dividend and Future Outlook - The company declared a dividend of HKD 1.127 per share for 2025, maintaining a payout ratio of 40%, which translates to an estimated dividend yield of approximately 5.80% based on the closing price on March 18 [11]. - For 2026, the company plans to add 5.45 million kW of wind and solar capacity, a 60% reduction compared to 2025, with capital expenditures expected to decrease by 2.5% [11]. - Projected earnings for 2026-2028 are HKD 11.088 billion, HKD 12.210 billion, and HKD 12.992 billion, with corresponding EPS of HKD 2.14, HKD 2.36, and HKD 2.51, and PE ratios of 8.86, 8.05, and 7.56, respectively [11].

Investment Rating - The report maintains a "Neutral" rating for Xinyi Energy, with a slight target price increase of 2.3% from HKD 1.28 to HKD 1.31, corresponding to a 5% dividend yield for 2026 [1]. Core Insights - The company's earnings for 2026-2027 are expected to be revised down by 2% and 5% respectively, with projected revenues and profits for 2025 at RMB 2.45 billion and RMB 1.01 billion, reflecting a year-on-year growth of 0.5% and 27.6% [1]. - The recurring profit, excluding a one-time gain of RMB 130 million from the sale of power stations, is anticipated to be RMB 910 million, which is below expectations due to lower-than-expected electricity sales caused by power restrictions [1]. - Electricity sales are projected to grow by 10% year-on-year, although a decline of 0.3% is expected in the second half of the year [1]. - The company has largely replaced its HKD borrowings with lower-interest RMB borrowings, resulting in a reduction of the average borrowing rate to 2.5%, which is a decrease of 1 and 0.4 percentage points year-on-year and quarter-on-quarter respectively [1]. - This shift is expected to reduce financial expenses by 24% in 2025, contributing significantly to core profit growth, although further reduction potential is considered limited [1]. Additional Information - The electricity restriction rate for the company is expected to exceed 10% in 2025, a significant increase from approximately 4% in 2024 [2]. - Despite this, new photovoltaic installations in mainland China are projected to reach 317 GW in 2025, representing a year-on-year growth of 14%, indicating that short-term improvements in electricity restrictions are unlikely [2]. - The company anticipates a substantial increase in subsidy receipts to RMB 910 million in 2025, up 87% year-on-year, with management indicating that accelerated subsidy receipts may become the norm [2]. - Management has stated that if future capital expenditures are lower and cash flow remains strong, there may be considerations to increase the dividend payout ratio [2].

Core Viewpoint - The article highlights the innovative "photovoltaic+" model implemented in Yibin City, which combines clean energy generation with traditional tea cultivation, showcasing a unique approach to sustainable agriculture and energy production [2] Group 1: Company Initiatives - Sichuan Zaobai Jian Tea Industry Co., Ltd. has established an ecological early tea base in the Dayanling Scenic Area, integrating solar panels with tea cultivation [2] - The "tea-light complementary" and "agriculture-light complementary" projects represent a new model for combining clean energy with local pillar industries [2] Group 2: Industry Trends - The integration of photovoltaic systems in agricultural practices is part of a broader trend towards sustainable energy solutions in the agricultural sector [2] - This model not only enhances energy efficiency but also promotes the growth of traditional industries like tea, indicating a shift towards more sustainable agricultural practices [2]

Core Insights - China's desertification prevention efforts have transformed regions in North China, with the "Three-North" project increasing forest coverage from 5.05% in the 1970s to 13.84% today [2] Group 1: Ecological Achievements - The Engebei Ecological Demonstration Zone in Inner Mongolia showcases successful cultivation of over 300 types of fruits and vegetables, including subtropical crops, in a previously desertified area [1] - The "Three-North" shelterbelt program is one of the world's largest and longest-running ecological restoration projects, achieving "zero growth" in land degradation [1] - 53% of China's desertifiable land has been effectively managed, highlighting the challenges of combating desertification [1] Group 2: Environmental Impact - The "Three-North" project has helped mitigate grassland degradation and reduced the frequency of severe sandstorms in affected areas [2] - A 400-kilometer "photovoltaic wall" is being constructed in the Kubuqi Desert, expected to provide clean energy to Beijing and surrounding regions by 2030, thereby decreasing reliance on coal [1]

Core Insights - The Shanxi Provincial Development and Reform Commission announced the bidding results for the 2026 renewable energy mechanism electricity prices, with a total scale of 8.186 billion kilowatt-hours [1] Group 1: Wind and Solar Pricing - The mechanism electricity price for wind power is set at 0.277 yuan per kilowatt-hour, while for solar power it is 0.3168 yuan per kilowatt-hour [1] - The total mechanism electricity volume includes 3.56 billion kilowatt-hours for wind power and 4.626 billion kilowatt-hours for solar power [1] Group 2: Project Participation - A total of 5,309 projects were selected in this bidding process, with 5,272 being solar projects and 37 being wind projects [1] - Among the solar projects, there are 42 centralized and 5,230 distributed projects, while the wind projects consist of 16 centralized and 21 distributed onshore projects [1] Group 3: Implementation Timeline - The mechanism electricity volume for projects already in operation will start from March 1, 2026, while projects not yet in operation will begin from the first day of the month following their declared production start date [1] - Selected projects are required to sign a price settlement mechanism agreement with grid companies within one month of the announcement of the bidding results [1]

Core Viewpoint - The event "Happy Opening Smile, Prosperous Desheng Year" showcased the achievements of rural revitalization in Desheng Village, combining folk performances, public welfare, and cultural tourism to celebrate the New Year and foster community spirit [1][3]. Group 1: Event Highlights - The event featured vibrant folk performances, including a grand parade of folk dances, dragon and lion dances, and street performances, creating a lively atmosphere that attracted attendees [1][3]. - A special area for local cuisine was set up, offering traditional dishes that reflect the village's culture, while public welfare activities distributed "Fu" characters to convey New Year blessings [3]. - The night concluded with a dazzling lantern display and a bonfire gathering, where villagers and visitors celebrated together, enhancing the cultural experience [3]. Group 2: Economic Development - Desheng Village has developed three key industries: potatoes, photovoltaics, and homestays, with annual potato production exceeding 10 million yuan, stable income from photovoltaics over 600,000 yuan, and over 50,000 tourists hosted in homestays [5]. - The village's average annual income per capita is projected to reach 25,800 yuan by 2025, with collective annual income reaching 3.5 million yuan, marking a significant transformation from a poor village to a prosperous one [5]. - Efforts to strengthen cultural teams and improve cultural facilities have integrated traditional culture with modern civilization, enriching the village's cultural atmosphere [5].

Group 1 - The Cuban government announced emergency measures to address fuel shortages caused by the U.S. cutting off oil supplies, with the primary goal of ensuring national survival and basic service provision while continuing development [1] - Starting from September 9, Cuba will further restrict fuel sales, limit administrative work to Monday through Thursday, promote remote work, and shorten school hours [1] - The fuel shortage will impact national transportation, leading to reduced interprovincial train and bus services, and some tourist facilities will be closed to conserve energy [1] Group 2 - Since 1962, Cuba has been under an economic blockade by the U.S., which has intensified this year by cutting off oil supplies and pressuring Mexico to stop oil shipments [2] - The United Nations expressed extreme concern over the humanitarian situation in Cuba, warning that failure to meet oil demand could worsen the situation [2] - Cuba's President Diaz-Canel announced plans to actively develop solar power to meet electricity needs in hospitals, nursing homes, and remote areas, with solar capacity reaching 1,000 megawatts, accounting for 38% of daytime electricity generation [2] Group 3 - Cuba aims to reduce dependence on oil imports by developing its solar industry as part of a long-term national strategy, with a goal to increase renewable energy's share of electricity generation to 30% by 2030 [3] - Currently, Cuba's electricity generation heavily relies on coal plants, and domestic heavy oil production meets only about 40% of energy consumption, indicating a continued high dependence on imports [3]

Economic Performance - Hainan Prefecture achieved a total GDP of 109.44 billion, with total fixed assets reaching 105.25 billion and local general public budget revenue at 10.31 billion during the 14th Five-Year Plan period [1] - Grain production remains stable at over 170,000 tons, with barley planting area accounting for 45% of the province and livestock inventory representing 25% [2] Ecological Development - Significant progress in ecological protection with three major ecological functional areas, including Sanjiangyuan, Qinghai Lake, and the Yellow River basin, showing improved environmental quality [1] - The region has seen a total of 28,200 species of birds and a fish stock of 127,500 tons of naked carp in Qinghai Lake, with grassland vegetation coverage reaching 60.08% [1] Industrial Transformation - Hainan Prefecture is focusing on upgrading traditional industries and expanding emerging sectors, with notable projects like the Taratand photovoltaic park and Longyangxia water-solar complementary project [1] - The region is integrating into national strategies such as "East Data West Computing" and developing a green computing industry park [1] Social Welfare - The government has committed to 20 annual public welfare projects, with fiscal spending in the welfare sector maintained above 80% for five consecutive years [2] - The urban registered unemployment rate is controlled within 3.5%, indicating a stable employment situation [2] Future Development Goals - Hainan Prefecture aims to deepen green development, focusing on ecological safety, high-quality economic growth, and technological innovation [3] - The region plans to enhance its reform and opening-up levels, improve the business environment, and promote social harmony and stability [4][5]