CISI FIN has reiterated its "Overweight" rating on DATANG RENEW (01798), noting that while the company's revenue saw modest growth in the first three quarters, net profit declined year-on-year due to lower electricity prices and credit impairment provisions. However, DATANG RENEW's wind and solar power generation increased significantly, with wind power output surging over 70% YoY. Additionally, accelerated government subsidy repayments led to a substantial improvement in cash flow.

**Performance Overview** DATANG RENEW reported its Q3 2025 financial results, with revenue reaching RMB 9.409 billion (+3.56% YoY), while net profit attributable to shareholders fell to RMB 1.653 billion (-11.59% YoY). In Q3 alone, revenue rose 4.25% YoY to RMB 2.564 billion, but net profit turned negative at RMB -35 million, compared to RMB 105 million in the same period last year.

**Key Factors Affecting Earnings** Lower electricity prices and credit impairment provisions of RMB 102 million (versus a reversal of RMB 38 million in the prior year) weighed on profitability. The effective tax rate also increased by 3.75 percentage points YoY, further pressuring earnings.

**Cash Flow Improvement** Government subsidy repayments accelerated, reducing accounts receivable and notes receivable to RMB 21.6 billion by the end of Q3, down RMB 2.8 billion from mid-year. Operating cash flow surged 54.35% YoY to RMB 7.89 billion, while capital expenditures halved to RMB 4.293 billion (-50.91% YoY).

**Investment Recommendation** CISI FIN maintains its "Overweight" rating, citing DATANG RENEW's leading position in the wind power sector and strong cash flow recovery potential. The firm forecasts 2025-2027 net profits of RMB 1.694 billion (-9.7% YoY), RMB 1.751 billion (+2.7% YoY), and RMB 1.911 billion (+7.2% YoY), with corresponding P/E ratios of 7.3x, 7.1x, and 6.6x as of November 18, 2025.

**Risks** Potential risks include policy uncertainties, further declines in electricity prices, rising ancillary service costs, higher raw material prices, and macroeconomic challenges.