For 3Q26, revenue was RMB2,907mn (-17.9% YoY), the attributable net profit was RMB21mn (-85.9% YoY), and the recurring net loss was RMB17mn (swinging to a loss YoY), as the low-wind season, off-peak natural gas demand, and reduced subsidies depressed quarterly earnings to near breakeven. For 9M26, revenue/attributable net profit/recurring net profit were RMB12,124/1,302/1,190mn (-16.1/-16.5/-22.6% YoY); the steeper decline in the net profit relative to the gross profit was mainly due to lower other income (-RMB365mn YoY), partially offset by lower financial expenses and higher investment income. We view 3Q as the earnings trough for the year, and current valuations already reflect near-term earnings pressure. Given stabilizing wind power generation and tariffs, sustained gas dollar margin expansion, a promising profit rebound in 2027 driven by concentrated commissioning of gas-fired power and energy storage projects, and stable shareholder returns backed by a dividend payout ratio of around 50%, we maintain BUY on both the A-shares and H-shares.
Renewable energy: stabilizing power output and tariffs
For 9M26, power generation was 10,688GWh (-0.74% YoY), with 3Q26 power generation down by 0.48% YoY on marginally better wind resources than in 1H26; for 9M26, the average on-grid tariff (ex-tax) was RMB0.40/kWh (-3.05% YoY), while the implied 3Q26 tariff was roughly flat YoY at around RMB0.377/kWh, suggesting the worst of the downward tariff pressure may have passed. For 1H26, newly added consolidated/managed installed capacity was 620/962MW, and we project full-year managed/consolidated capacity additions at around 1.1GW/over 1.0GW; meanwhile, the completed divestment of its PV business sharpens its focus on core wind power operations. Cumulative valid filings for energy storage reached 1,200MW/3,800MWh, with the Shuangluan and Guyuan projects already connected to the grid for trial operation, positioning peak-shaving revenue for gradual realization. Capacity expansion and energy storage commissioning are building momentum for an earnings recovery in the renewable-energy segment in 2027.
Earnings forecasts and valuation
We lower our 2026/2027/2028 attributable net profit forecasts by 14.43/12.96/9.92% to RMB1,718/2,203/2,797mn (three-year CAGR of 15%), corresponding to EPS of RMB0.38/0.49/0.62. We cut our GPM forecasts for the renewable-energy segment given lower-than-expected power generation and rigid wind power costs, and trim our natural gas sales volume forecasts due to long-term contract disruptions stemming from Middle East tensions. We estimate 2027E EPS for the renewable energy/natural gas segments of RMB0.29/0.20. Based on Wind consensus and using an SOTP valuation, for the A-shares, we apply 24x/10x 2027E PE to the renewable energy/natural gas segments, deriving our target price of RMB8.97 (previous: RMB11.19); for the H-shares, we apply 8x/9x 2027E PE to the renewable energy/natural gas segments, deriving our target price of HKD4.81 (previous: HKD4.20).
Risks: sharp fluctuations in natural gas prices, slower-than-expected commissioning of gas-fired power plants, higher-than-expected wind curtailment rates, tariff policy adjustments in Hebei province, slower-than-expected utilization ramp-up at LNG terminals.