Zhejiang Zheneng Electric Power Co Ltd

Zhejiang Zheneng Electric Power Co Ltd maintains a capital structure characterized by significant leverage typical of the utility sector, with total liabilities of 79.8 billion CNY against total equity of 76.5 billion CNY. The debt-to-equity ratio stands at 0.64, supported by long-term debt of 49.3 billion CNY. Liquidity is assessed as medium risk, with a current ratio of 1.03, indicating minimal short-term buffer. The company generates substantial operating cash flow of 11.5 billion CNY, which covers capital expenditures of 7.2 billion CNY, resulting in free cash flow of 1.7 billion CNY. Despite positive cash generation, the firm holds negative net cash after subtracting total debt, highlighting reliance on debt financing for its asset base.

Profitability metrics reflect a stable but modest return profile, with a return on equity (ROE) of 9.17% and a return on assets (ROA) of 4.49%. The company reports net income of 7.5 billion CNY on revenue of 79.6 billion CNY, yielding a net margin of approximately 9.5%. Operating income of 9.2 billion CNY suggests efficient cost control relative to gross profit of 9.7 billion CNY. Without specific cohort median data provided in the input, these returns are evaluated against general utility industry standards, where ROE in the 9-10% range is typical for regulated or semi-regulated power producers. The valuation snapshot shows a price-to-earnings ratio of 10.34 and a price-to-book ratio of 0.95, suggesting the market prices the equity at a slight discount to its book value.

Revenue concentration is not detailed by segment or geography in the available data, limiting specific analysis of exposure risks. The company operates primarily within the Chinese market as an independent power and renewable electricity producer. The absence of segment breakdown prevents assessment of diversification benefits or concentration risks across different power generation sources or regional markets. The business model relies on the volume of electricity generated and sold, subject to regulatory pricing mechanisms and fuel cost fluctuations inherent to the electric utilities industry.

Growth trajectory analysis is constrained by the absence of historical period data in the input. The latest normalized period shows revenue of 79.6 billion CNY, but without prior year comparisons, year-over-year growth rates cannot be calculated. The capital expenditure of 7.2 billion CNY indicates ongoing investment in infrastructure, likely for maintenance or expansion of generation capacity. The stability of the revenue base is implied by the consistent cash flow generation, but specific growth trends remain unquantifiable from the provided snapshot.

Risk factors include medium liquidity risk and low dilution risk. The key flag notes negative net cash after debt subtraction, emphasizing the importance of maintaining access to capital markets and managing debt maturity profiles. The current ratio of 1.03 leaves little room for operational shocks, requiring careful working capital management. Dilution risk is low, with basic and diluted shares outstanding identical at 13.4 billion, indicating no significant options or convertible securities currently impacting share count.

Recent events are reflected in analyst sentiment, with a mean price target of 6.67 CNY, representing a potential upside from the current market price of 5.41 CNY. The mean recommendation is 1.00 (strong buy), driven by two strong-buy ratings, suggesting analysts view the current valuation as attractive. Competitor context lists Duke Energy, NextEra Energy, and Southern Company, though no specific comparative metrics are provided. The strong buy consensus contrasts with the modest ROE, potentially indicating expectations for margin expansion or regulatory tailwinds.

Free cash flow surged 51.5% year-over-year to CNY 1.7 billion, demonstrating significant improvement in cash generation capabilities.

Return on equity of 9.17% exceeds the electric utilities cohort median of 6.28%, indicating superior capital efficiency.

Analysts assign a strong buy rating with a mean price target of CNY 6.67, implying 8.8% upside.

Debt-to-equity ratio of 0.64 is below the cohort median of 0.75, suggesting a more conservative leverage profile.

Revenue declined 9.6% year-over-year to CNY 79.6 billion, signaling weakening top-line growth momentum.

Operating income fell 10.0% year-over-year to CNY 9.2 billion, indicating deteriorating core operational profitability.

The company faces a high credit risk flag, raising concerns about potential debt servicing or default issues.

Long-term debt increased to CNY 49.3 billion in FY2026, maintaining a heavy debt burden despite revenue declines.

Revenue ¥79.55B, −9,6% YoY; Operating income −10,0% YoY.

• ▍Revenue ¥79.55B, −9,6% YoY
• ▍Operating income −10,0% YoY
• ▍Net income −2,9% YoY
• ▍Free cash flow +51,5% YoY
• ▍Net margin 9.5%

Revenue ¥88.00B, −8,3% YoY; Operating income +10,0% YoY.

• ▍Revenue ¥88.00B, −8,3% YoY
• ▍Operating income +10,0% YoY
• ▍Net income +18,9% YoY
• ▍Free cash flow −68,5% YoY
• ▍Net margin 8.8%

Revenue ¥95.98B, +19,7% YoY; Operating income +391,5% YoY.

• ▍Revenue ¥95.98B, +19,7% YoY
• ▍Operating income +391,5% YoY
• ▍Net income +457,8% YoY
• ▍Free cash flow +173,2% YoY
• ▍Net margin 6.8%

Revenue ¥80.19B, +12,8% YoY; Operating income −9,6% YoY.

• ▍Revenue ¥80.19B, +12,8% YoY
• ▍Operating income −9,6% YoY
• ▍Net income −117,8% YoY
• ▍Free cash flow +3,9% YoY
• ▍Net margin -2.3%

Revenue ¥71.08B; Operating income -¥2.89B.

• ▍Revenue ¥71.08B
• ▍Operating income -¥2.89B
• ▍Net margin -1.2%