Analysis of Valuation and Strategic Layout Impact of Wanneng Power

This analysis focuses on Wanneng Power’s valuation under the expectation of electricity price reversal and the impact of its 15th Five-Year Plan new energy and UHV layout on performance. Social analyst reports indicate that the power sector is currently in a phase of “price leading, logic following”, similar to the trend of the non-ferrous metals sector at the beginning of the year [0]. Wanneng Power’s current P/E ratio of 8.27x and P/B ratio of 1.15x are below the industry average, confirming it is in a valuation trough [0]. For thermal power business, if positive factors such as capacity electricity price hikes and coal price declines are realized, profits will be directly improved [0].

The company’s strategic layout of 50% new energy installed capacity in the 15th Five-Year Plan and UHV transmission of green electricity (not yet officially confirmed) will be of great significance if implemented: increasing the proportion of new energy can reduce dependence on coal price fluctuations, and UHV transmission of green electricity can expand market scope and improve new energy asset utilization. As of December 19, 2025, Wanneng Power’s closing price was 8.21 yuan, up 4.59% year-to-date and 22.85% in the past three months, outperforming the broader market [0]; technically, it is in sideways fluctuation with a trading range of 8.11-8.28 yuan [0].

1. Valuation Trough and Repair Potential
   : Wanneng Power’s low valuation reflects market concerns about its traditional thermal power business, but factors such as coal price declines and capacity electricity price support can repair profit expectations and drive valuation repair [0].
2. Long-Term Value of Strategic Layout
   : If the 15th Five-Year Plan new energy and UHV layout are implemented, it will achieve business structure transformation from a single thermal power to a diversified model of “thermal power + new energy + green electricity transmission”, enhancing performance stability and growth space.
3. Market Sentiment and Verification Gap
   : Current market optimism about Wanneng Power is partially based on strategic expectations, but core strategic details (such as specific content of the 15th Five-Year Plan and UHV cooperation) have not been officially confirmed, leading to risks of expectation fulfillment.

: 1) Coal price rebound may affect thermal power profits; 2) Uncertainty about the timing and magnitude of electricity price reversal; 3) Risk of unimplemented 15th Five-Year Plan and UHV layout; 4) Relatively optimistic DCF model assumptions (e.g., low WACC of 3.9%, high terminal growth rate) [0].
: 1) Continuous release of favorable policies for the power sector; 2) Large potential for valuation repair; 3) If new energy and UHV layout are implemented, growth space will be opened.

Wanneng Power is currently in an industry valuation trough, benefiting from positive factors for thermal power and having potential for valuation repair. If its strategic layout of 50% new energy installed capacity in the 15th Five-Year Plan and UHV transmission of green electricity is implemented, it will enhance performance certainty and growth flexibility. Attention should be paid to: 1) Official confirmation and promotion of strategic planning; 2) Changes in power market supply and demand and electricity price trends; 3) Impact of coal price fluctuations on thermal power profits.

Details of the company’s 15th Five-Year Plan and UHV layout have not been officially confirmed; further attention should be paid to company announcements or authoritative media reports; DCF analysis results are too broad and optimistic, and model assumptions need to be carefully reviewed.