Shaangu Power's Decade-Long Transformation: Services & Operations Now Account for About Two-Thirds of Revenue

By He Yupu | China Securities Journal

After a decade of strategic transformation, ShaanGu Power has fundamentally reshaped its revenue structure, with services and operations now contributing approximately two-thirds of total revenue, marking the gradual formation of a "second growth curve," the company recently disclosed.

Revenue Breakdown

According to the company's 2025 financial report:

• Energy conversion equipment: RMB 3.066 billion, accounting for roughly one-third of total revenue
• Industrial services: RMB 1.693 billion, with a gross margin of 26.46%
• Energy infrastructure operations: RMB 4.646 billion, up 17.26% year-on-year, representing nearly half of total revenue

Combined, services and operations now contribute approximately two-thirds of total income — a significant shift for a company originally built on turbomachinery, where equipment sales are no longer the primary revenue driver.

Market Performance and Contract Growth (First Half of 2026)

• Overseas market sales contracts: up 95.67% year-on-year
• Chemical market sales contracts: up 123.46% year-on-year
• Centrifugal compressor orders: doubled year-on-year
• Emerging sectors (compressed air energy storage, green hydrogen-ammonia-methanol, CCUS): multiple unit breakthroughs achieved

Industrial Services Portfolio (2025)

• Operational spare parts service projects: 530
• Maintenance, repair, and remote online service projects: 707
• Energy-saving service projects: 102
• Remote online diagnostic center: covering over 1,000 users and thousands of products

Energy Infrastructure Operations

The energy infrastructure operations segment increasingly resembles a long-term contract model:

• Contracted gas supply volume under operation: exceeds 1 million Nm³/h
• On June 27, the company announced plans to acquire a 36.06% stake in Qinfeng Gas via share issuance, further consolidating gas operation assets into the listed entity

"Gas operations are like a long-term pipeline — once running, cash flow becomes more stable," said a company business representative.

R&D and Technological Progress (First Half of 2026)

• R&D expenditure: RMB 184 million, up 15.21% year-on-year
• Cumulative patents held: 821
• Cumulative approved and published standards: 143, including 61 national standards
• AVH150: The world's largest axial compressor for industrial applications completed key technology breakthroughs
• Compressed air energy storage: Full technical capability coverage from 10MW to 350MW; the 300MW non-supplementary combustion high-efficiency compressor unit passed technical appraisal, reaching internationally advanced levels
• Manufacturing: The blade digital workshop's "lights-out" production line is now fully operational
• Digital simulation: Leveraging a high-performance computing platform and supercomputing center, large-scale computing time has been reduced to one-seventh of the original duration

Green and Low-Carbon Initiatives

ShaanGu Power treats carbon reduction as a systemic calculation. At an East China steel enterprise's 3,200 m³ blast furnace, a new-generation energy recovery turbine retrofit increased power generation by 21.77%, adding 24.83 million kWh annually and reducing CO₂ emissions by approximately 15,000 tons per year.

Company management summarized: "The value of equipment manufacturers is not only reflected in individual machines, but also in the overall energy efficiency of the customer's process flow."

Financial Performance (First Half of 2026)

• Operating revenue: RMB 4.988 billion, up 2.44% year-on-year
• Net cash flow from operating activities: RMB 509 million, up 109.95% year-on-year
• Comprehensive gross margin: 22.26%, up 1.61 percentage points year-on-year
• Proposed cash dividend: RMB 1 per 10 shares
• Cumulative dividends since listing: RMB 7.991 billion, with a dividend-to-financing ratio of approximately 4.7x
• The company has paid cash dividends every year since listing and is among the top ten holdings of multiple CSI Dividend Low Volatility ETFs

Valuation and Industry Comparison

According to data from China Securities Index Co., as of September 18:

• General equipment manufacturing industry (static P/E): 43.33x
• ShaanGu Power (static P/E): approximately 20.63x — less than 60% of the industry average

In the recent IPO filing of Shengu, ShaanGu Power was listed as a comparable company. For 2025:

• Operating revenue: RMB 9.422 billion
• Net profit attributable to shareholders: RMB 748 million
• Recurring net profit: RMB 692 million

These figures place ShaanGu Power among the top performers among comparable peers. On September 18, Donghai Securities issued an "overweight" rating for the company.

Outlook

As 2026 marks the first year of the "15th Five-Year Plan," the transformation toward high-end, intelligent, and green manufacturing continues to accelerate. Industry insiders noted that from policy documents to financial statement line items, a decade of exploration in service-oriented manufacturing has now crystallized into a quantifiable revenue structure at ShaanGu Power.