Thermal Power's Monthly Bidding Transformation: Analysis of Jingneng Power and Wanneng Power

Based on company data and analysis results from brokerage APIs, the transformation of thermal power enterprises to monthly bidding transactions is profoundly changing the investment landscape of the power industry. Below is a detailed analysis of thermal power enterprises such as Jingneng Power and Wanneng Power in response to market-oriented reforms:

1. Market Transformation Background and Investment Impact
   The transformation of thermal power enterprises from traditional base load power sources to peak regulation markets means their revenue structure shifts from relying on annual long-term contract electricity to monthly bidding and auxiliary service markets. This transformation prompts investors to focus on enterprises’ ability to flexibly adjust power generation strategies and their competitiveness in the spot market.

2. Differences in Market Performance Between Jingneng Power and Wanneng Power

• Jingneng Power (600578.SS)
  : The stock price rose 48.16% throughout 2025, reflecting the market’s positive expectations for its flexible response to market-oriented reforms and improvement in asset quality.
• Wanneng Power (000543.SZ)
  : The stock price rose 5.10% throughout 2025, with a smaller increase, possibly related to the market’s wait-and-see attitude towards its business structure adjustment and profitability.

3. Comparison of Fundamentals and Financial Conditions

• Jingneng Power
  : P/E ratio of 10.07 times, P/B ratio of 1.47 times, return on equity (ROE) of 12.63%, net profit margin of 9.51%, current ratio of 0.54, quick ratio of 0.49. Financial analysis shows a conservative financial attitude and high debt risk.
• Wanneng Power
  : P/E ratio of 7.84 times, P/B ratio of 1.09 times, return on equity (ROE) of 14.63%, net profit margin of 8.14%, current ratio of 0.62, quick ratio of 0.57. Financial analysis also shows a conservative financial attitude and high debt risk.

From the perspective of financial indicators, both enterprises maintain a conservative financial attitude, but Wanneng Power has slightly better ROE and liquidity, which may affect its resilience in the monthly bidding market.

4. Challenges and Responses in Market-Oriented Transformation
   (1) Strategy Shift: Thermal power plants shift from pursuing excess returns to signing guaranteed contracts at reasonable prices, and pay more attention to participating in monthly bidding and auxiliary service markets (such as peak regulation and frequency regulation) to enhance short-term revenue flexibility.
   (2) Finance and Operation: Low liquidity ratios increase financing costs and operational risks, but a conservative financial attitude helps maintain stability amid market fluctuations. By reducing the proportion of long-term contracts, enterprises can retain more electricity to participate in monthly bidding to capture higher price opportunities.
   (3) Investment Impact: Investors will focus on evaluating enterprises’ flexibility, cash flow stability, and performance in auxiliary service markets, which may lead to divergence in stock prices and valuations.

5. Investment Strategy Recommendations
   For long-term investors, priority can be given to thermal power enterprises with flexible peak regulation capabilities, controllable asset-liability structures, and effective participation in monthly bidding and auxiliary service markets. In the short term, it is necessary to closely track the progress of power market-oriented reforms and the impact of relevant policies on revenue structures.

In summary, driven by power market-oriented reforms, the revenue structure of thermal power enterprises tends to be diversified, with both investment risks and opportunities coexisting. Based on brokerage API data, the 2025 stock price performance and financial indicators of Jingneng Power and Wanneng Power reflect the market’s different expectations for their ability to respond to market-oriented reforms. Enterprises can enhance their competitiveness in the monthly bidding market by improving operational flexibility, optimizing asset allocation, and maintaining stable finances.