Guosheng Securities: Intensive issuance of renewable energy subsidies benefits green electricity operators, ushering in a turnaround

According to the Zhitong Finance APP, Guosheng Securities released a research report stating that recently, multiple renewable energy power generation operators, including NYOCOR Co., Ltd., have concentrated on receiving renewable energy subsidy funds. In 2024, the State Grid has issued six batches of renewable energy electricity price additional subsidy funds, totaling over 100 billion yuan. The accelerated recovery of renewable energy subsidies is expected to ease the cash flow of green electricity operators, buffering the price pressure after the comprehensive market entry driven by Document No. 136, which is favorable for green electricity operators to welcome a turnaround. It is recommended to prioritize attention to undervalued Hong Kong stocks in green electricity and wind power operators.

The main points of Guosheng Securities are as follows:

Recently, multiple renewable energy power generation operators have concentrated on receiving renewable energy subsidy funds

NYOCOR Co., Ltd.: As of August 31, 2025, the company has received a total of 1.214 billion yuan in renewable energy subsidy funds, an increase of 341.67% compared to the same period last year, accounting for 190.12% of the total renewable energy subsidy funds received in 2024; among them, the national renewable energy subsidy funds amount to 1.199 billion yuan, an increase of 340.47% compared to the same period last year, accounting for 188.78% of the total national renewable energy subsidy funds received in 2024.

TYN: As of August 31, 2025, the company has received a total of 2.319 billion yuan in renewable energy subsidy funds, an increase of 232.23% compared to the same period last year, accounting for 169.77% of the total renewable energy subsidy funds received in 2024; among them, the national renewable energy subsidy funds amount to 2.252 billion yuan, an increase of 258.60% compared to the same period last year, accounting for 182.64% of the total national renewable energy subsidy funds received in 2024.

JinkoSolar: As of August 31, the company has received a total of 891 million yuan in renewable energy subsidy funds, an increase of 248% compared to the same period last year, accounting for 166% of the total renewable energy subsidy funds received in 2024; among them, the national renewable energy subsidy funds amount to 850 million yuan, an increase of 272% compared to the same period last year, accounting for 178% of the total national renewable energy subsidy funds received in 2024.

Subsidy recovery is expected to accelerate, alleviating cash flow pressure for green electricity operators

In 2012, the Ministry of Finance, the National Development and Reform Commission, and the National Energy Administration issued the first batch of renewable energy electricity price additional subsidy fund directories to promote the initial development of the renewable energy industry. However, with the rapid expansion of renewable energy project scales, subsidy applications gradually lagged behind. According to the China Electricity Council's report on "Issues of Renewable Energy Subsidy Arrears and Policy Recommendations," by the end of 2019, the total subsidy arrears in the operational areas of the State Grid, Southern Grid, and Inner Mongolia West Grid amounted to 327.309 billion yuan.

In March 2022, the three ministries jointly issued a notice on "Conducting Self-Inspection of Renewable Energy Power Generation Subsidies" to address the issue of renewable energy subsidy arrears; in May, the State Council deployed measures to stabilize prices and ensure energy supply, allocating an additional 50 billion yuan to central power generation enterprises; in August, the Southern Grid established Guangzhou Renewable Energy Development Settlement Service Co., Ltd. to coordinate and resolve renewable energy power generation subsidy issues.

In 2023, the State Grid and Southern Grid issued an announcement on "Publishing the First Batch of Compliant Projects for Renewable Energy Power Generation Subsidies," with the first batch of compliant lists released, involving a total of 7,335 projects. As of now, the second batch of compliant lists has not yet been released. In 2024, the State Grid will issue six batches of renewable energy electricity price additional subsidy funds, totaling over 100 billion yuan Guosheng Securities believes that Document No. 136 ("Notice on Deepening the Market-oriented Reform of New Energy Grid Connection Prices to Promote High-quality Development of New Energy") promotes the comprehensive entry of new energy into the market, intensifying competition in the new energy power generation sector. Against this backdrop, the national renewable energy subsidy recovery is accelerating, which is expected to greatly alleviate the cash flow pressure on green power operators, benefiting the turnaround of operators in distress and favoring the long-term development of the industry.

Investment Recommendations

It is recommended to prioritize undervalued Hong Kong green power and wind power operators, with a focus on Xintian Green Energy (00956), Zhongmin Energy (600163.SH), and Funeng Co., Ltd. (600483.SH). Attention is also advised for the thermal power sector with resilient quarterly performance: Huaneng International (600011.SH, 00902), Huadian International (600027.SH, 01071), Baofeng New Energy (000690.SH), Sheneng Co., Ltd. (600642.SH), Jiantou Energy (000600.SZ), and Zhejiang Energy Power (600023.SH); as well as leading companies in thermal power flexibility transformation: Qingda Environmental Protection (688501.SH) and Huaguang Huaneng (600475.SH).

It is recommended to focus on green power operators with a high proportion of existing projects and better short-term revenue certainty, as well as those with cost reduction and efficiency enhancement advantages in the medium to long term. For hydropower defense, attention is advised for Yangtze Power (600900.SH), Guotou Power (600886.SH), Chuan Investment Energy (600674.SH), and Huaneng Hydropower (600025.SH); in the nuclear power sector, it is recommended to focus on China National Nuclear Power (601985.SH) and China General Nuclear Power (003816.SZ, 01816).

Risk Warning

Raw material prices may rise beyond expectations; project construction progress may fall short of expectations; policies regarding power auxiliary services market, green certificate trading, etc., may not meet expectations