Guojin Securities has issued a research report reiterating a "Buy" rating on Xinyi Energy (03868). Based on the company's latest power station operations, the profit forecasts for 2026 and 2027 have been adjusted to 1.02 billion yuan and 1.043 billion yuan, respectively, with a newly added 2028 net profit forecast of 1.054 billion yuan. According to the 2025 dividend payout ratio, the estimated dividend per share for 2026 is approximately 0.059 yuan. The current share price corresponds to a 2026 PE ratio of 9.76x, a PB ratio of 0.7x, and a dividend yield of 5.0%. The main points from Guojin Securities are as follows.
The company released its 2025 annual report on February 27. It reported revenue of 2.453 billion yuan, a year-on-year increase of 0.5%, and a net profit of 1.011 billion yuan, a year-on-year increase of 27.8%. A final dividend of 0.036 Hong Kong dollars per share was declared. The proportion of grid-parity projects increased to 62.6%, and the company is actively promoting overseas project development.
In 2025, Xinyi Energy acquired 230MW of photovoltaic power stations from its parent company and 64MW of wind power stations from Xinyi Glass and Xinyi Energy Storage. It also sold a 51% equity interest in 174MW of photovoltaic power stations to an independent third party. By the end of 2025, the total capacity of power stations held and operated by the company reached 4.80GW, with grid-parity projects accounting for 62.6%. Furthermore, the company is actively advancing overseas power station development. A 100MW photovoltaic power station project by a Malaysian joint venture commenced construction in the second half of 2025 and is expected to be connected to the grid around the end of 2026.
Increased output from previously acquired projects drove a 10% year-on-year growth in electricity generation. However, factors such as grid curtailment and electricity marketization impacted the average selling price. The company is actively enhancing its market trading capabilities. In 2025, the company's electricity generation increased by 10.1% year-on-year, primarily contributed by projects acquired in 2024 and 2025. Yet, grid absorption constraints leading to curtailment losses and market-based power trading affected the company's electricity price, resulting in only a slight 0.5% increase in sales revenue. Grid curtailment also led to a slight increase in costs, with the gross profit margin decreasing by 3.8 percentage points year-on-year to 61.8%. To adapt to electricity market changes, the company has established a professional market trading team, built a power trading platform, and continues to promote the digital and intelligent upgrade of its power trading mechanisms to further strengthen its competitive market advantage.
The company has optimized its debt structure, leading to a decrease in financing costs. Plans to issue REITs are expected to further improve cash flow. Since 2024, the company has increased its long-term domestic bank borrowings while reducing short-term offshore loans. By the end of 2025, the proportion of short-term borrowings within the company's bank loans had decreased by 4.6 percentage points year-on-year to 30.1%, effectively reducing financing costs. Interest expenses on bank borrowings decreased by 29.5% year-on-year to 225 million yuan in 2025. On June 3, 2025, the company announced that application materials for a proposed China-listed solar farm infrastructure REIT had been submitted to the National Development and Reform Commission. The issuance of REITs is expected to further improve the company's cash flow and enhance its risk management capabilities.
Risks include slower-than-expected subsidy disbursements, deterioration in grid absorption conditions, and a decline in feed-in tariffs.
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