Cinda Securities: Assigns a Buy rating to New Jiyuan Energy

Xinda Securities Co., Ltd. recently conducted research on Xinji Energy and released a research report titled “Q4 coal sales price and cost continue to improve, capital expenditures are set to peak, dividend increases are promising,” giving Xinji Energy a “Buy” rating.

Xinji Energy (601918)

Event: On March 27, 2026, Xinji Energy released its 2025 annual report. In 2025, the company achieved operating revenue of RMB 12.28 billion, down 3.51% year over year; attributable net profit was RMB 2.136 billion, down 10.73% year over year; net profit after deducting non-recurring items was RMB 2.14 billion, down 10.37% year over year. Net cash flow from operating activities was RMB 3.104 billion, down 10.25% year over year. Of that, in Q4 alone the company achieved operating revenue of RMB 3.271 billion, down 7.56% year over year and up 2.24% quarter over quarter; attributable net profit was RMB 660 million, up 15.99% year over year and up 18.59% quarter over quarter. Regarding dividends, the company’s 2025 profit distribution proposal is to pay a cash dividend of RMB 1.20 per 10 shares (including tax), for a total cash dividend of RMB 311 million.

Commentary:

Coal power segment: Revenue and cost improved on a quarter-over-quarter basis on a continuous basis, and the upward shift in the Q1 coal price mid-point is expected to keep performance improving. In terms of coal production and sales volume, in 2025 the company’s raw coal output was 22.1696 million tons, up 3.01% year over year; commercial coal output was 19.7582 million tons, up 3.69% year over year; and commercial coal sales volume was 19.6929 million tons, up 4.35% year over year. Of that, in Q4 alone raw coal output was 5.3659 million tons, down 9.74% year over year and down 4.30% quarter over quarter; commercial coal output was 5.0775 million tons, down 1.81% year over year and up 7.04% quarter over quarter; and commercial coal sales volume was 5.2244 million tons, up 2.72% year over year and up 3.77% quarter over quarter. On price, in 2025 the average coal sales price was RMB 532.48 per ton, down 6.16% year over year. Of that, in Q4 alone the average coal sales price was RMB 558.15 per ton, down 4.11% year over year and up 8.75% quarter over quarter. On cost, in 2025 the cost of commercial coal was RMB 322.76 per ton, down 4.98% year over year. Of that, in Q4 alone the cost of commercial coal was RMB 309.89 per ton, down 7.88% year over year and down 5.50% quarter over quarter. Overall, in Q4 the coal power segment’s revenue and costs achieved continuous improvement on a quarter-over-quarter basis for two consecutive quarters, and with revenue and cost jointly boosting, the quarter’s coal power segment gross margin improved significantly quarter over quarter by 39.01%. With the escalation of the situation in the Middle East in Q1, we believe the global energy price mid-point will continue to rise; we therefore believe domestic coal prices are expected to further achieve ongoing quarter-over-quarter improvement, and segment performance is expected to continue to improve.

Power segment: Quarterly on-grid electricity volume performed poorly; with the batch commissioning of units in Q1–2, it is expected to effectively offset the decline in power prices. In 2025, benefited from the commissioning and power generation of the Phase II power plant of Bajiang, the company’s full-year electricity volume increased year over year. In terms of electricity volume, in 2025 the company achieved on-grid electricity volume of 13.791 billion kWh, up 12.53% year over year; of that, in Q4 alone on-grid electricity volume was 3.411 billion kWh, down 17.59% year over year and down 16.85% quarter over quarter. On electricity price, in 2025 the average on-grid electricity price was RMB 0.3762 per MWh, down 7.45% year over year. Overall, the company’s on-grid electricity volume decreased significantly both year over year and quarter over quarter in Q4, with poor performance; and in 2026 the Anhui provincial power annual trading contract’s average clearing price was RMB 369.91 per MWh, down by about 4.2 cents per kWh compared with RMB 412.35 per MWh in 2025, creating substantial pressure from the power price decline. However, the company is expected to see batch commissioning of under-construction units in the first half of 2026. As of March 27, the Shangrao power plant and the Chuzhou power plant have both been formally put into commercial operation, and Unit 1 of the Lu’an power plant has successfully completed a first ignition. We expect that the company’s under-construction units will be able to complete full commissioning in the first half and effectively offset the pressure caused by the decline in electricity prices. In addition, we believe this round of electricity price decline may cause an upside-than-expected impact on reasonable returns in the thermal power industry; as the coal price mid-point stabilizes and rebounds since Q1, the vicious cycle of “coal price decline—power price decline” over the past two years may come to an end in 2027. Looking further out into the medium to long term, electricity prices are expected to rebound to a reasonable range, lifting the company’s power segment earnings to a new level.

Core advantages: Integrated and synergistic development of coal and power, and after the capital expenditure peak, dividends are expected to increase. The company’s under-construction coal-fired power unit capacity is as high as 4.64 million kW, distributed in Anhui, Jiangxi, and other places. Among them, the Shangrao power plant, Chuzhou power plant, and Lu’an power plant in Jiangxi are expected to complete commissioning in 2026. By 2026, the company’s coal-and-power controlled installed capacity is expected to reach 7.96 million kW, driving the segment’s earnings to achieve high growth. After all under-construction power plants are put into operation, we expect that the fuel coal used by the power plants will mainly be supplied by the company’s own coal production, forming a “coal and power integration” model, which may enable stable profitability. At the same time, the company’s major under-construction power plant projects are all expected to be fully commissioned in 2026, and there are currently no approved projects on hand for follow-up. After the capital expenditure peak, the company’s free cash flow is expected to increase significantly, and the company may gradually have strong potential to increase dividends and pay high dividends.

Earnings forecast and investment rating: As a leading coal-and-power integration company under China Coal Group, Xinji Energy has high-quality coal assets and strong cost management capabilities. With rapid growth in plant capacity and coordinated development across coal and power integration, it has both potential for steady operations and high earnings growth. We adjust our forecast for attributable net profit for 2026–2028 to RMB 2.142/2.436/2.487 billion, respectively; the PE ratios based on the closing price on March 27 are 9.66/8.50/8.32 times, respectively. We maintain the “Buy” rating.

Risk factors: Risks of a substantial decline in coal prices; risks of declines in power prices and power utilization hours for coal and power; risks that project construction progress will not meet expectations; risks of accidents in safety production at coal mines.

The latest breakdown of earnings forecasts is as follows:

Within the past 90 days, this stock has received ratings from 5 institutions in total, with 5 of them giving a “Buy” rating; within the past 90 days, the institutions’ average target price was 9.16.

The content above is organized based on publicly available information by Securities Star, generated by an AI algorithm (Record No. 310104345710301240019), and does not constitute investment advice.