格隆汇发布山高新能源1H25更新报告（英文）

Profit level remained resilient. In 1H25, SHNE’s total revenue/net income reached RMB 2,400 million/RMB 287 million, in-line with our estimate of RMB 2,479 million/ RMB 285 million in our update report. Gross profit stood at RMB 1,203 million, representing a gross profit margin of 50.2%. Administrative expenses decreased to RMB 201 million, reflecting the company’s ongoing efforts in cost optimization and operational efficiency. Net income attributable to shareholders was RMB 287 million, increasing by 4% year-over-year. The improvement on profit mainly driven by three factors: (1) Improving profit from joint ventures and associates; (2) decreasing finance costs by replacing high-cost financing with low-cost financing and early re-payment of high-cost overseas borrowings by the company; (3) decreasing administrative expenses due to the cost control and efficiency enhancement of the company.

In 1H25, wind power performance was eye-catching. For marginal changes, as of the end of June 2025, the total installed capacity of power generation projects under construction and approved for construction has reached 4.9 GW, including 13 medium-to-large projects each with capacity exceeding 100 MW, and 30 projects with an aggregate capacity of approximately 890 MW has received formal internal investment decisions. In 1H25, the company's grid-connected wind power project capacity in Shandong is 234 megawatts, and the company's wind power reserve project in Shandong is 991 megawatts. At the same time, the company is also striving for the sea breeze project in Shandong Province.

Integrated AI computing ecosystem gradually takes effects, and business collaboration promoted a closed loop. As of the end of 2024, China's computing power scale is 414 EFlops, combined with the capital expenditure of major cloud factories and chip shipment forecasts, it is expected that the compound annual growth rate of China's computing power scale is expected to reach 44% from 2024 to 2026, driving 8.0/9.1GW of new data centers in 2025/2026, corresponding to 530/63.3 billion kWh of incremental electricity consumption. China's electricity consumption is expected to grow by 6.1% in 2025, of which data centers will contribute 0.5 percentage points. The company has significant economy of scale and deep project reserves in green power generation fields such as photovoltaic and wind power. SHNE’s formed business partner with VNET's IDC business, which used “base-type” and “city-based” business in parallel. The designed power density of a single rack at the Ulanqab base reaches 8KW, 60% higher than traditional data centers. As the Ulanqab project connects to the grid in the near future, the company will provide green power support for the AI infrastructure business, bringing significant synergy to company.

Transportation-energy integration with SDHSG and comparison to Equinix (EQIX.O). In terms of traffic-energy integration, according to the memorandum of understanding signed in between, SDHG and the company will promote strategic cooperation to achieve mutual benefit and complementary advantages, and help the company develop at high speed and with high quality. Comparison to overseas Equinix, and integrated AI computing ecosystem build the moats for SHNE. As a global AIDC leader, Equinix has a deep layout of new energy and enjoys the valuation premium of green assets. Equinix's in-depth layout in the three aspects of ESG ratings for new energy (PPA) green bond financing has synergistically reduced WACC, reduced operating costs (electricity costs), increased ROIC, and attracted a large amount of long-term capital with the help of ESG trends, ultimately bringing a valuation premium to "green assets" and directly driving the continuous growth of corporate market capitalization. AI has led to an explosive global demand, and electricity is the lifeline of AIDC. Clean energy is crucial for customer acquisition, cost reduction, and regulatory compliance for AIDC. For SHNE, the integration strategy of AI computing ecosystem is becoming the standard configuration of AIDC and industrial operators.

Valuation Suggests Upside Potential. Despite its solid fundamentals and expansion momentum, SHNE remains undervalued relative to peers. The company’s shares are currently trading at HK$2.15, equating to a market capitalization of HK$4,830 million. Based on projected CY2025 EPS of HK$0.14, this implies a forward P/E ratio of 16x—below the peer average of 20x. This valuation discount presents an attractive entry point for investors, especially considering SHNE’s strategic focus on green computing power and its extensive renewable energy pipeline.