Xinji Energy’s new power plants drive a sharp rise in generation, while coal and electricity prices determine earnings sensitivity
In the first three quarters of 2026, Xinji Energy’s electricity generation rose 88.75% year on year, as capacity added at three new power plants contributed a full quarter of generation in the third quarter. Kaiyuan Securities expects a recovery in on-grid thermal power prices and higher dividends next year, but forecasts a lower overall gross margin for the full year than in the previous year.
Original source：财联社First published on Unhidea：Original source date：
Key takeaway
Xinji Energy’s growth is being driven by increased output from new power plants, with improved coal profitability and a potential recovery in electricity prices expected to provide support. Revenue is growing faster than profit, however, and the overall gross margin is forecast to decline for the full year.
How much difference have the new power plants made?
In the first three quarters of 2026, the company generated 20.821 billion kilowatt-hours of electricity, up 88.75% year on year; electricity supplied to the grid was 19.66 billion kilowatt-hours, up 89.40% year on year.
All units at the Shangrao, Chuzhou and Lu’an power plants have entered commercial operation, and the added capacity contributed a full quarter of generation in the third quarter. Generation reached 8.519 billion kilowatt-hours in the quarter, up 95.17% year on year and 34.24% quarter on quarter.
The expansion of power operations drove the company’s revenue for the first three quarters up 41.23% year on year to 12.725 billion yuan, but net profit attributable to shareholders rose 18.33% year on year to 1.747 billion yuan, growing more slowly than revenue.
Why can the coal business support profitability?
Commercial coal sales in the first three quarters were 14.8988 million tonnes, up 2.97% year on year; the gross margin on coal sales was 39.85%, up 2.42 percentage points year on year. Kaiyuan Securities believes higher coal prices improved profit per tonne.
The company operates both coal and power generation businesses, and increased output from the new plants has expanded the scale of its integrated coal and power operations. However, Kaiyuan Securities forecasts an overall gross margin of 34.6% for 2026, below the 40.0% recorded in 2025; the improvement in the coal business’s gross margin and the decline in the overall gross margin coexist.
What underpins expectations of an electricity price recovery?
The average day-ahead trading price in Jiangsu rose to 399.59 yuan per megawatt-hour in September 2026, up 18.3% month on month; the average from 1 October to the 22nd was 401.51 yuan, a further 0.5% above the September average.
Kaiyuan Securities believes higher spot electricity prices could strengthen expectations of price increases in annual long-term contracts. As a new round of annual contracting progresses, expectations for blended thermal power prices and revenue may improve, potentially benefiting Xinji Energy.
How are earnings forecasts and dividend expectations changing?
Kaiyuan Securities maintains its earnings forecasts for the company for 2026–2028: net profit attributable to shareholders of 2.865 billion yuan, 3.361 billion yuan and 3.83 billion yuan, respectively, corresponding to price-to-earnings ratios of 8.7 times, 7.4 times and 6.5 times at the share price used in the report.
In September 2026, the company said it had no major capital expenditure planned for the time being after all its new thermal power projects entered operation. Kaiyuan Securities believes the dividend payout ratio could rise as construction spending falls and unit profitability increases; the company’s cash dividend payout ratio was 20.62% in 2025, higher than 7.45% in 2021.
The risks identified by the brokerage include macroeconomic growth falling short of expectations and coal prices declining more than expected.
