In-Line with market expectation. In FY25, SHNE achieved total revenue/net profit of RMB4.4 billion and RMB0.2 billion respectively, in line with our estimates. The net profit was weighed down by other income and gains, elevated other operating expenses, and losses from joint ventures. Gross profit amounted to RMB2.0 billion, representing a gross margin of 45%, indicating a stable GPM YoY. Key financial highlights including: (1) Finance costs decreased by approximately RMB182 million, mainly driven by early repayment of high-cost overseas borrowings, refinancing with lower-cost funding, and the issuance of RMB2.5 billion "Green + Rural Revitalization" bonds. (2) Cash reserves increased by RMB971 million from FY24 to RMB4.6 billion. (3) The asset-liability ratio declined to 59% as the company repaid part of its outstanding loans. During FY25, the company issued RMB2.5 billion of medium-term notes and short-term financing instruments. As a result, the comprehensive financing cost decreased by around 50bpts, falling further to approximately 3.6%.

The company maintains a robust project pipeline, and its future development is promising. In terms of new projects, wind power and centralized photovoltaic power have become the core drivers of growth. (1) New wind power projects reached 1,098MW, including 60MW Yufeng Project in Weifang, Shandong; 125MW Anqiu Project in Weifang, Shandong; 40MW Jiaocheng Project in Lvliang, Shanxi; 40MW Pengze Project in Jiangxi; 20MW Arun Banner Project in Hulunbuir, Inner Mongolia; 63MW Meizi’ao Project in Yixian, Yunnan; 20MW Qujing Project in Yunnan; 50MW Songming Project in Yunnan; 30MW Xundian Project in Yunnan; 300MW Suihua Project in Heilongjiang; 100MW Linze Project in Gansu; 100MW Ganzhou Project in Gansu; 100MW Gaotai Project in Gansu, etc. (2) New centralized photovoltaic projects reached 717MW, including 170MW Wanzhuang Project in Hebei; 150MW Feidong Project in Anhui; 27MW Kaiping Project in Guangdong; 100MW Phase I & 50MW Phase II Songyang Projects in Yunnan; 100MW Shekuaixiang Project in Kunming, Yunnan; 120MW Zhuanghe Project in Liaoning.

The on-grid capacity has steadily increased, the wind power business has achieved leapfrog growth, and the new energy operation and maintenance capabilities have realized external spillover. From the perspective of current project grid connection, the capacity reached 4,961MW in 2025 (2024: 4,698MW), including 1,270MW of wind power installed capacity, 2,603MW of centralized photovoltaic power and 1,088MW of distributed photovoltaic power. From the perspective of project reserves, the wind power reserve projects in Shandong/Guangxi/Jilin/Heilongjiang are 1073/400/370/300 MW respectively, leading among all provinces in the country. Key wind power projects include (1) 212.5MW centralized onshore wind power project in Mudan District, Heze, Shandong; (2) 175MW distributed wind power project in Yuncheng, Shandong; (3) 287.5MW wind power project in Dingtao District, Heze. In parallel, in terms of entrusted operation services, relying on the mature new energy operation and maintenance system, the operation and maintenance capabilities have realized external spillover and market-oriented output. For example, it won the operation and maintenance services of 4 new energy stations (with a total of 412MW) of State Power Investment Corporation and China Power Investment Corporation in Shanxi, as well as the entrusted operation and maintenance services of 6 wind farms with a total of 470.2MW of Jiangsu Branch of Huadian New Energy Group Co., Ltd. in Jiangsu.

Upside potential continues to unlock. From the perspective of installed capacity, the quality of the company's reserve projects in 2026 has been optimized. After abandoning projects aggregating more than 1 GW without investment value, the total reserve projects still achieved a net growth of 303MW throughout the year. We expect 300-400MW of the projects under construction in 2026 to be connected to the grid, and 700-800MW in 2027. Despite its sound fundamentals and strong expansion momentum, its value remains undervalued relative to peers. The company’s stock is currently trading at HK$1.60 , corresponding to a market capitalization of HK$3,595 million. We expect CY2026 EPS of HK$0.14, implying forward P/E rate of 12x —below the peer average of 18x. This valuation discount presents an attractive entry point for investors, especially considering SHNE’s integration of transportation and energy, electricity-computing synergy, and continuous expansion of its renewable energy project reserve.