New Sky Green Energy 2025 Annual Report Analysis: Operating Cash Flow Surges by 96.11%, R&D Expenses Drop by 28.31%

Core Profitability Indicators Interpretation

Operating Revenue: Down 7.21% Year-over-Year, Natural Gas Sector Significantly Dragging

In 2025, Xintian Green Energy achieved an operating revenue of 19.83B yuan, a decrease of 7.21% year-over-year. By business segment, natural gas sales revenue was 13.34B yuan, down 11.13% year-over-year, which is the main reason for the revenue decline, primarily due to weakened market demand. The total natural gas sales volume was 4.77B cubic meters, a decrease of 7.47% year-over-year; wind/solar power generation revenue was 6.13B yuan, up 2.92%, mainly benefiting from a 10-hour increase in average wind power utilization hours to 2,236 hours, driving a 6.78% increase in power generation to 14.85 billion kWh.

Net Profit and Non-Recurring Net Profit: Both Increase, Wind Power Business Leading Growth

Net profit attributable to shareholders of the listed company was 1.83B yuan, up 9.21%; non-recurring net profit was 1.66B yuan, up 1.61%. The faster growth of net profit compared to non-recurring net profit is mainly due to a 1.28B yuan increase in non-operating income and expenses, reaching 163 million yuan, with gains from re-measuring the fair value of equity holdings in subsidiaries amounting to 69.51 million yuan being the main contributor to the increase.
By segment, wind/solar power achieved a net profit of 1.61B yuan, up 11.95%, fully offsetting the negative impact of a 25.01% decline in natural gas net profit to 358 million yuan, making it the core driver of profit growth.

Earnings Per Share: Basic EPS Up 7.50%

Basic earnings per share were 0.43 yuan/share, up 7.50%, consistent with the profit growth trend; non-recurring EPS was 0.39 yuan/share, unchanged from last year, reflecting that the growth in non-recurring net profit roughly matched the expansion of share capital (in 2025, the company issued 307 million H-shares to specific targets, with share capital increasing by 7.33%).

In-Depth Analysis of Expense Structure

Sales Expenses: Slight Decrease of 3.00%, Scale Remains Low

In 2025, sales expenses were 5.8539 million yuan, down 3.00%, mainly due to a reduction in sales personnel and salaries. The proportion of sales expenses to revenue was only 0.03%, reflecting that the company’s electricity and natural gas sales mainly target direct grid supply and industrial customers, with a low proportion of consumer-facing (To C) business.

Management Expenses: Up 13.37%, Cost Control Under Pressure

Management expenses were 801 million yuan, up 13.37%, mainly due to increases in repair costs, employee compensation, and depreciation/amortization. The management expense ratio was 4.04%, up 0.81 percentage points year-over-year, indicating that management costs have risen significantly during business expansion.

Financial Expenses: Down 13.34%, Effectively Optimized Financing Costs

Financial expenses were 1.06B yuan, down 13.34%, mainly due to lower financing interest rates. The full-year interest expenses were 1.07B yuan, a decrease of 17.07 million yuan; interest income was 25.8M yuan, down 829,700 yuan year-over-year, leading to an overall reduction in financial expenses. The company effectively lowered capital costs by replacing high-interest existing loans and negotiating better rates for new loans.

R&D Expenses: Sharp Drop of 28.31%, Capitalization Rate Increased

R&D expenses were 270 million yuan, down 28.31%, mainly due to reduced depreciation and amortization costs. However, capitalized R&D expenditure was 7.3493 million yuan, up from last year, indicating progress in commercializing R&D projects.

R&D Personnel: Stable Team Size, High Proportion of Highly Educated Staff

The company has 230 R&D personnel, accounting for 7.5% of total staff. The team size remains stable. In terms of educational background, 112 hold master’s degrees or above (48.7%), and 118 hold bachelor’s degrees (51.3%), indicating a high overall educational level supporting technological innovation. The age distribution is mainly 30-40 years old, accounting for 52.6%, showing a relatively young R&D team.

Cash Flow and Financing Performance

Operating Cash Flow: Surged 96.11%, Cost Control in Procurement Key

Net cash flow from operating activities was 8.3M yuan, up 96.11%, mainly due to a reduction of 7.3B yuan in cash paid for purchasing goods and services to 3.17B yuan, a decline of 18.91%, far exceeding the revenue decrease, reflecting effective cost management in natural gas procurement.

Investing Cash Flow: Net Outflow Expanded 26.72%, Capital Expenditure Increased

Net cash flow from investing activities was -13.61B yuan, an increase of 26.72% in net outflow, mainly due to a 8.8B yuan increase in cash paid for the purchase and construction of fixed assets, intangible assets, and other long-term assets to 5.54B yuan, a 73.63% rise. Notably, capital expenditure on wind and solar projects was 9.27B yuan, up 177.48%, indicating intensified investment in wind power projects.

Financing Cash Flow: Net Inflow Grew 13.96%, Equity Financing Major Contributor

Net cash flow from financing activities was 8.66B yuan, up 13.96%, mainly due to the receipt of 1.5 billion yuan from issuing other equity instruments (green medium-term notes) and funds raised from targeted H-share placements. The company received 3.29B yuan in borrowings during the year, repaid 18.7B yuan in debt, with a continued optimized debt structure.

Risk Warnings

Wind Power Business Risks

2. Wind Resource Uncertainty: The inherent randomness of wind resources may lead to decreased wind speeds in 2026, affecting power generation;
3. Power Curtailment Risks: Some regions’ grid construction lagging may worsen curtailment issues with new wind projects;
4. Construction Risks: Tightening land policies and difficulties in land coordination may impact project progress;
5. Electricity Price Fluctuation Risks: Expansion of market-based trading could lead to declining electricity prices.

Natural Gas Business Risks

2. Price Adjustment Risks: Deepening reforms in natural gas pricing may lead to reductions in pipeline transportation fees and urban gas charges;
3. Market Expansion Difficulties: Upstream gas suppliers extending to downstream markets may intensify competition;
4. Accounts Receivable Risks: Uncertainty in recovering debts from old clients in the glass industry;
5. Demand Shortfall Risks: Global trade imbalances and warm winters may suppress natural gas consumption growth;
6. Price Volatility Risks: Fluctuations in international energy markets and geopolitical factors may cause LNG procurement costs to vary;
7. Pipeline Safety Risks: Urban expansion leading to insufficient safety distances between pipelines and surrounding structures, increasing high-consequence area risks.

Other Risks

2. Interest Rate Risks: Large borrowing needs may be affected by interest rate changes, impacting funding costs;
3. Exchange Rate Risks: Importing LNG settled in USD may be affected by exchange rate fluctuations, influencing procurement costs;
4. Safety Risks: Aging wind farm equipment, deteriorating gas pipelines, and third-party damages could increase safety management pressures.

Senior Management Compensation

Chairman: Pre-tax Total Compensation for the Period is 0 Yuan

Chairman Cao Xin received no pre-tax compensation during the period; his remuneration mainly comes from the controlling shareholder Hebei Construction Investment.

General Manager: Pre-tax Compensation of 1.1016 Million Yuan

General Manager Tan Jianxin’s pre-tax total compensation was 1.1016 million yuan, including 471.1k yuan in salary and allowances, 572.9k yuan in performance bonuses, and 57.7k yuan in retirement contributions, reflecting a mix of fixed and performance-based pay.

Vice Presidents: Compensation Range 360.6k - 980.3k Yuan

• Lu Yang: Pre-tax salary of 920.7k yuan, including 35,020 yuan in salary, 512.8k yuan in bonuses, and 57.7k yuan in retirement contributions;
• Lu Shengxin: Pre-tax salary of 834.9k yuan, including 35,090 yuan in salary, 426.3k yuan in bonuses, and 57.7k yuan in retirement contributions;
• Ban Zefeng (resigned): Pre-tax salary of 980.3k yuan, including 39,770 yuan in salary, 524.8k yuan in bonuses, and 57.7k yuan in retirement contributions;
• Guo Yanxun: Pre-tax salary of 360.6k yuan, appointed as Vice President on January 3, 2025, with salary and retirement contributions during the term.

Chief Financial Officer: Pre-tax Salary of 659.9k Yuan

CFO Liu Tao’s pre-tax salary was 659.9k yuan, including 324.8k yuan in salary, 277.3k yuan in bonuses, and 57.7k yuan in retirement contributions.

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Editor: Xiaolang Kuaibao