This article first appeared on GuruFocus .
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Consolidated Operating Revenue:RMB106.91 billion, down 4.58% year over year.
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Net Profit Attributable to Shareholders:RMB6.59 billion, down 28.89% year over year.
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Earnings Per Share (EPS):RMB0.35.
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Domestic On-Grid Power Sales:199.78 billion kilowatt-hours, down 2.97% year over year.
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Average Tariff:RMB463.02 per megawatt-hour, down 4.59% year over year.
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Standard Coal Price:RMB891.02 per ton, down 2.84% year over year.
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Newly Added Renewable Capacity:2.55 gigawatts added in the first half of 2026.
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Total Installed Capacity:159 gigawatts under control, with low-carbon clean energy comprising over 42%.
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Tuas Power EBIT:RMB745 million in the first half of 2026.
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Sahiwal Plant Earnings:RMB451 million in the first half of 2026.
Release Date: August 19, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Renewable capacity grew by 2.55 GW in H1 2026, with low-carbon clean energy now comprising over 42% of total installed capacity.
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Tuas Power in Singapore delivered a strong EBIT of RMB745 million, while the Sahiwal Plant in Pakistan contributed RMB451 million in earnings.
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The company successfully reduced standard coal costs by 2.84% year-on-year to RMB891.02 per ton through strategic procurement and inventory management.
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Coal-fired units achieved higher spot market tariffs (RMB387/MWh) compared to medium- and long-term contracts, boosting profitability.
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The company maintained a dividend payout ratio of no less than 50%, with 2026 dividends increasing 50% year-on-year to RMB0.4 per share.
Negative Points
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Consolidated operating revenue fell 4.58% year-on-year to RMB106.91 billion, and net profit attributable to shareholders dropped 28.89% to RMB6.59 billion.
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Domestic on-grid power sales decreased 2.97% and average tariffs fell 4.59% due to rising renewable capacity displacing coal-fired generation.
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Unit fuel costs surged in Q2 2026, with a 14.56% quarter-on-quarter increase, driven by higher coal and gas prices amid geopolitical tensions.
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Tuas Power's profitability declined due to expiring high-margin contracts, a stronger Singapore dollar, and higher carbon taxes, reducing EBIT by RMB618 million year-on-year.
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Several plants reported losses in H1 2026, including 12 coal-fired plants (60% of total) and 44 PV farms (11%), reflecting tariff declines and rising fuel costs.
Q & A Highlights
Q: What is the tariff mechanism for Tuas Power in Singapore, and what drove the year-on-year changes in its profitability during the first half of 2026? What is the outlook for the second half? A: Minggang Wen (Chief Accounting Officer, Secretary of the Board) explained that Tuas Power's portfolio is split into three parts: 20% is contracted with the government at stable rates, 70% is long-term retail contracts with margins linked to gas and financial hedging, and 10% is exposed to the volatile spot market. The year-on-year decrease in EBIT (down RMB618 million) was driven by a 6.3% depreciation of the Singapore dollar against the RMB (impacting profit by ~RMB90 million), a rise in Singapore's carbon tax from SGD25 to SGD45 per ton (adding ~RMB24 million in costs), and a decrease in margins of about SGD22 per megawatt-hour. The margin compression occurred because high-margin contracts signed in 2023-2024 expired, and new contracts were signed against a backdrop of lower spot prices. Management noted that since spot prices have risen recently, they are actively seeking new contracts to lock in higher margins for the second half of the year.
Q: Can you break down the on-grid power tariffs by energy type for the first half of 2026, and what is the expectation for tariffs in the second half? A: A company representative provided the breakdown: Coal-fired units averaged RMB445.26/MWh (down 5.56% YoY), gas-fired units averaged RMB792.57/MWh (up 6.71% YoY), wind power averaged RMB462.67/MWh (down 3.48% YoY), PV farms averaged RMB370.44/MWh (down 5.32% YoY), hydropower averaged RMB361.4/MWh (up 0.77% YoY), and biomass averaged RMB718.38/MWh (down 0.91% YoY). The overall decline reflects the rapid growth of renewables nationwide, which is taking market share from thermal units.
Q: What is the company's outlook for coal prices and unit fuel costs in the second half of 2026, given the rebound seen in Q2? A: Management expects the coal supply to remain tight in H2 2026. Domestic output is constrained by security inspections, and spot market prices are currently high, with long-term contract suppliers reluctant to fulfill agreements. Internationally, Indonesia's export quotas and Middle East geopolitical tensions add risk. They noted that if inventory levels are better than predicted, spot prices could be lower than expected, but a tight inventory situation would support higher prices. The company plans to manage this by optimizing long-term contract fulfillment, adjusting purchase schedules, and using domestic and international spot markets strategically.
Q: What is the company's progress on its 2026 new installed capacity target of 7.7 GW, and will this target be adjusted? A: The company confirmed it has not adjusted its full-year plan for renewables. By the end of Q1, they had more than 10 GW of installed capacity under construction, which is sufficient to support the full-year goal. In H1 2026, they added 3.04 GW of new capacity, including 2.55 GW of renewable capacity and 490 MW of gas-fired units, bringing total controlled installed capacity to 159 GW, with low-carbon clean energy accounting for over 42%.
Q: What is the breakdown of the company's net profit by different energy types for the first half of 2026? A: The company representative detailed the H1 2026 net profit: Coal-fired units contributed RMB4.87 billion (down RMB1.18 billion YoY), gas-fired units contributed RMB707 million (up RMB180 million YoY), wind power contributed RMB2.73 billion (down RMB704 million YoY), PV contributed RMB1.06 billion (down RMB594 million YoY), and hydropower contributed RMB44 million (up RMB31 million YoY). The biomass sector was at breakeven.
Q: How many power plants are currently making a loss, and what are the main reasons? A: By the end of H1 2026, 12 coal-fired power plants (60% of the company's coal fleet) were making a loss, primarily located in Liaoning, Northwest China, and Hubei province. Additionally, 4 gas-fired units (25%) and 11 wind farms (8.8%) and 44 PV farms (11%) were also loss-making. The losses are attributed to lower tariffs and increased unit fuel costs.
Q: What is the company's strategy for improving profitability by shifting power generation to peak hours, and what is the outlook for electricity storage? A: Management stated they are refining market strategies to shift the power generation curve for better efficiency at peak hours. Regarding electricity storage, they noted that according to Document #136, storage is no longer a prerequisite for renewable project construction, leading to a more market-based approach. By the end of June, the company had 802 MW (1,661 MWh) of storage in operation and 653 MW (1,390 MWh) under construction. Future storage construction will be based on local market conditions and demand.
Q: What is the company's dividend policy and outlook for 2026? A: The company reiterated its commitment to a dividend payout ratio of no less than 50%, as per its articles of association. In 2026, they dispatched dividends of RMB0.4 per share, a 50% increase from the RMB0.27 per share paid in 2024. Management emphasized they aim to strike a balance between financial needs, development plans, and shareholder returns, and are devoted to optimizing dividend policies.
Q: What is the breakdown of coal purchases by source (long-term, spot, overseas) and their respective prices in Q2 2026? A: In Q2 2026, long-term contracts covered 44.5% of consumption at a standard coal price of RMB907.56/ton. Spot market purchases accounted for 30.72% of the share at RMB958.66/ton, and overseas market purchases took 24.78% of the share at RMB998.01/ton. The higher cost of spot and overseas coal contributed to the quarter-on-quarter increase in unit fuel costs.
Q: What is the company's strategy for its 15th Five-Year Plan (2026-2030)? <
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
