<div id="readability-page-1"><div>Fitch Ratings-Hong Kong/Shanghai-03 December 2025:Fitch Ratings has affirmed Shenzhen Energy Group Co., Ltd.'s Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'A-'. The Outlook is Stable.Shenzhen Energy's rating is aligned with, but not equalised to, our internal assessment of Shenzhen municipality under our Government-Related Entities (GRE) Rating Criteria. We believe that Shenzhen Energy is 'Extremely Likely' to receive government support because of its strategic importance to local energy development and power security. Shenzhen Energy is the city's largest power producer, with total installed power capacity of 23.7GW in 2024.Key Rating Drivers'Very Strong' Contagion Risk: Shenzhen Energy is viewed by capital markets as a reference issuer for the Shenzhen municipal government. The company is among the three largest GREs with high policy intensity owned by Shenzhen State-owned Assets Supervision and Administration Commission (SASAC). It is also one of the largest and most active domestic bond issuers. We believe a default by the company would have a severe impact on the funding access of many other Shenzhen state-owned entities.'Strong' Preservation of Government Policy: Shenzhen Energy has a critical role in the city's energy development and power security. It owns half of the city's grid-managed thermal installed capacity and is a key base load provider. The company was mandated to construct 70% of the city's new gas-fired power capacity under China's 14th five-year plan. Shenzhen Energy also provides other public services, including treating over 90% of the city's waste. In addition, it invests in liquefied natural gas (LNG) terminals to ensure the city's gas supply.'Strong' Decision-Making and Oversight: Shenzhen Energy is ultimately 50%-owned by the Shenzhen SASAC. The Shenzhen government has broad control over the company's operations and strategies and directly appoints key management.'Strong' Precedents of Support: Shenzhen Energy obtains financing support from the government for key infrastructure projects through low-cost policy loans and special bonds. It also has exclusive rights to develop certain energy-related projects in Shenzhen. It receives annual subsidies, although the amount is small due to its healthy financial positionSCP Revised to 'bb+': We raised the SCP for Shenzhen Energy to 'bb+', from 'bb', reflecting the enhanced business profile due to higher renewable and environmental profit contributions. The company has demonstrated resiliency against industry downturns and fuel price fluctuations. Its SCP will be further supported by strong financial flexibility, underpinned by its strong funding access, and a healthy interest coverage ratio of above 4.5x in 2025-2028, which broadly aligns with peers with a 'bb+' SCP.Thermal Margin Supported by Capacity Tariff: We expect Shenzhen Energy's coal-fired unit gross profit to be supported by the rise in the capacity tariff to CNY160/kW from CNY100/kW starting from 2026. Guangdong's market power tariff remains under pressure due to a competitive local landscape. Even so, its impact on Shenzhen Energy is limited, as Guangdong-based coal-fired power only accounts for around 6% of its gross profit.We expect the gross profit margin of gas power to increase during 2025-2026, as Guangdong's gas capacity tariff increased significantly - by 65%-296%, depending on the generation unit type - from August 2025. In addition, we expect the company's overall gas procurement cost to decline from 2026 onwards, due to our expectation of lower international LNG prices and increased contributions from its long-term LNG procurement contracts.Rising Renewable Mix: We expect Shenzhen Energy's renewable capacity share to rise to 51% in 2028, from 36% in 2025, reflecting faster renewable developments and limited new thermal additions. The pipeline includes about 4GW of wind and solar projects, and we expect annual renewable installations of 1.5GW-2.1GW during 2025-2028.Leverage Decline: We expect EBITDA net leverage to decline towards 7.5x during 2025-2028, from 8.1x in 2024. Free cash flow will remain negative as capex stays elevated at CNY11 billion-13 billion a year in 2025-2028 to support the renewables build-out. However, capex has moderated from the 2023 peak, as most thermal projects have been completed. We estimate EBITDA at a CAGR of around 8% as thermal margins recover and new renewable and environmental projects come online. Minority equity contributions have also helped the company to deleverage.Peer AnalysisWe assess Shenzhen Energy's state decision-making as 'Strong', compared with Zhejiang Provincial Energy Group Company Ltd. (ZEG, A/Stable), which is assessed as 'Very Strong'. Both entities are tightly controlled and closely monitored by their respective local governments, but Shenzhen Energy is a listed company with significant minority shareholders. Both companies have 'Strong' precedents of government support, including annual subsidies and financing assistance.Shenzhen Energy's preservation of government policy is assessed as 'Strong', in line with ZEG, reflecting important roles in local energy security. Both companies are assessed as 'Very Strong' for contagion risk. They rank among the largest GREs in their jurisdictions, with high policy intensity, and are viewed as reference borrowers with funding costs comparable to those of their respective local governments.Fitch’s Key Rating-Case Assumptions- Total power capacity to reach 31.4GW by 2028, with the clean energy capacity mix exceeding 84% by 2028, from 75% in 2024;- Thermal power utilisation hours to decline in 2025-28 as the company rationalises power output and gives way to renewable power;- Coal and gas prices to decline in line with Fitch's price deck assumptions in 2025-2028;- Thermal power tariff to decline amid lower coal and gas prices;- Dark spread to decline slightly in 2025 amid lower tariffs in Guangdong, but margins to rise in 2026 on higher capacity tariffs;- City gas sales volume to increase at a CAGR of 8% in 2024-2028;- Unit gas profit to edge lower to CNY0.28-0.31/cubic metres during 2025-2028 (CNY0.32/cubic metres in 2024);- Capex to remain elevated at CNY11 billion-13 billion during 2025-2028.RATING SENSITIVITIESFactors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade- A lowering of Fitch's internal assessment of the creditworthiness of Shenzhen municipality;- Weakening likelihood of support from Shenzhen municipality.Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade- A higher internal assessment of the creditworthiness of Shenzhen municipality, provided the likelihood of support from the municipality remains intact;- Higher likelihood of support from Shenzhen municipality.Liquidity and Debt StructureShenzhen Energy's total debt was CNY98 billion (including perpetual bonds), with CNY16.5 billion of short-term debt at end-September 2025. The company has total available cash of CNY18.5 billion (including inter-bank deposits), which is sufficient to cover short-term debt. Shenzhen Energy also has strong financing channels with ample bank facilities from the major domestic banks, and strong access to capital markets.Summary of Financial AdjustmentsFitch adjusted CNY17.5 billion in perpetual bonds as debt, as the bonds contain a look-back provision.REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. Public Ratings with Credit Linkage to other ratingsShenzhen Energy's Long-Term IDR is linked to Fitch's internal assessment of the credit profile of Shenzhen municipality.MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Click here to access Fitch's latest quarterly Global Corporates Sector Forecasts Monitor data file which aggregates key data points used in our credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG ConsiderationsThe highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.Shenzhen Energy Group Co., Ltd.; Long Term Issuer Default Rating; Affirmed; A-; Rating Outlook StableContacts:Primary Rating AnalystTony Wu, CFAAssociate Director+852 2263 9639tony.wu@fitchratings.comFitch (Hong Kong) Limited19/F Man Yee Building 60-68 Des Voeux Road CentralHong KongSecondary Rating AnalystWei Yu,Director+86 21 6898 7983wei.yu@fitchratings.comCommittee ChairpersonPenny Chen,Senior Director+86 21 6898 7996penny.chen@fitchratings.comMEDIA RELATIONS: Jack Li, Beijing, Tel: +86 10 5957 0964, Email: jack.li@thefitchgroup.comVivian Kam, Hong Kong, Tel: +852 2263 9612, Email: vivian.kam@thefitchgroup.comAdditional information is available on www.fitchratings.comApplicable ModelNumbers in parentheses accompanying applicable model(s) contain hyperlinks to criteria providing description of model(s).Corporate Monitoring &amp; Forecasting Model (COMFORT Model), v8.2.0 (1,2)ADDITIONAL DISCLOSURESDodd-Frank Rating Information Disclosure FormSolicitation StatusAdditional Disclosures For Unsolicited Credit RatingsEndorsement StatusEndorsement PolicyALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. 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Fitch Ratings has affirmed Shenzhen Energy Group's Long-Term Foreign-Currency Issuer Default Rating at 'A-', with a stable outlook. The company is strategically important for Shenzhen's energy development and power security, receiving government support. Shenzhen Energy's renewable capacity is expected to rise, and its financial flexibility is strong, supported by a healthy interest coverage ratio. Despite high capex, EBITDA net leverage is expected to decline, aided by minority equity contributions.

Fitch Affirms Shenzhen Energy at 'A-'; Outlook Stable