Breaking Down Yunnan Wenshan Electric Power Co.,Ltd. Financial Health: Key Insights for Investors

Curious whether Yunnan Wenshan Electric Power Co., Ltd. (600995.SS) is a buy, hold or watch? This deep-dive teases the numbers that matter: trailing twelve-month revenue of CN¥6.41 billion with quarterly revenue growth of 17.50%, a robust gross profit margin near 47.7% and an operating margin of 43.65%, yet offset by a levered free cash flow of -CN¥5.87 billion and a total debt-to-equity ratio of 89.58%; add a market cap of CN¥32.06 billion, a trailing P/E of 26.39 (forward P/E 20.06), and planned capital deployment including a CN¥4.7 billion investment in the Meizhou pumped storage phase II (1,200 MW) on top of 10,280 MW already commissioned-read on to unpack revenue drivers, profitability metrics, liquidity, valuation multiples and the risks and growth opportunities that investors should weigh.

Yunnan Wenshan Electric Power Co.,Ltd. (600995.SS) - Revenue Analysis

• Fiscal year revenue (2024): CN¥6.41 billion
• TTM revenue (as of 2025-03-31): CN¥6.41 billion
• Quarterly revenue growth (Q1 2025 vs prior quarter): 17.50%
• Revenue per share (TTM): CN¥2.00

• High gross and operating margins indicate strong pricing power and operational efficiency.
• 17.50% quarterly revenue growth reflects positive demand or favorable tariff/contract dynamics in early 2025.
• Revenue per share of CN¥2.00 provides a per-share lens for valuation and dividend/earnings expectations.

Yunnan Wenshan Electric Power Co.,Ltd. (600995.SS) - Profitability Metrics

Key profitability indicators for Yunnan Wenshan Electric Power Co.,Ltd. (600995.SS) reflect a company with strong operational margins and moderate returns on capital as of the latest reported periods.

• Net Profit Margin (as of 2025-03-31): 18.97% - solid conversion of revenue into net income.
• Operating Margin: 43.65% - indicates strong operational efficiency and cost control.
• Return on Assets (ROA) TTM: 3.05% - moderate asset utilization to generate earnings.
• Return on Equity (ROE) TTM: 6.13% - modest returns for shareholders relative to equity base.
• Trailing P/E (as of 2025-07-04): 26.39 - market pricing implying growth expectations.
• Forward P/E: 20.06 - market anticipates earnings growth; implies a lower implied valuation versus trailing P/E.

Practical investor considerations include:

• High operating margin suggests durable competitive advantages in operations or favorable cost structure.
• ROA and ROE are modest - consistent with utility-like capital intensity; leverage and asset base should be reviewed.
• The gap between trailing and forward P/E (26.39 vs 20.06) implies expected earnings growth or normalization; validate via guidance and analyst estimates.
• Combine these metrics with cash flow, debt levels, and regulatory environment when assessing valuation and risk.

Company context and background relevant to interpreting these metrics: Yunnan Wenshan Electric Power Co.,Ltd.: History, Ownership, Mission, How It Works & Makes Money

Yunnan Wenshan Electric Power Co.,Ltd. (600995.SS) - Debt vs. Equity Structure

Key balance-sheet and valuation metrics as of the most recent reporting and market dates highlight how Yunnan Wenshan Electric Power balances leverage, liquidity and market valuation. Below are the primary figures investors should consider when assessing capital structure and relative valuation.

• Total debt to equity ratio: 89.58% (as of March 31, 2025)
• Current ratio: 2.71 (indicating strong short-term liquidity)
• Book value per share: CN¥6.80
• Enterprise value / Revenue: 8.08
• Enterprise value / EBITDA: 12.65
• Market capitalization: CN¥32.06 billion (as of July 1, 2025)

Implications for investors:

• The 89.58% debt-to-equity ratio signals a moderate leverage profile - the company uses meaningful debt but is not highly leveraged relative to equity.
• With a current ratio of 2.71, short-term obligations appear comfortably covered by current assets, reducing immediate liquidity risk.
• Book value per share at CN¥6.80 provides a tangible baseline for assessing market price versus net asset backing.
• EV/Revenue of 8.08 and EV/EBITDA of 12.65 place the company at a premium relative to revenue and a moderate premium relative to operating earnings, useful for relative valuation comparisons within the sector.
• Market cap of CN¥32.06 billion situates the company's market value and, when combined with net debt, defines the enterprise value used in the EV multiples above.

For historical context, ownership details and how the company operates, see: Yunnan Wenshan Electric Power Co.,Ltd.: History, Ownership, Mission, How It Works & Makes Money

Yunnan Wenshan Electric Power Co.,Ltd. (600995.SS) - Liquidity and Solvency

• Current ratio: 2.71 - indicates the company can comfortably meet short-term liabilities with current assets.
• Total debt to equity: 89.58% - reflects a balanced reliance on debt financing relative to shareholders' equity.
• Operating cash flow (TTM): CN¥3.96 billion - strong cash generation from operations.
• Levered free cash flow (TTM): -CN¥5.87 billion - negative, pointing to heavy capex, financing outflows, or debt service impacts.
• Total cash (as of 2025-03-31): CN¥5.94 billion - a substantial cash reserve supporting liquidity.
• Book value per share: CN¥6.80 - useful proxy for net asset value per share.

• Liquidity drivers: solid operating cash flow and a CN¥5.94 billion cash reserve.
• Solvency considerations: near 90% debt/equity ratio implies manageable leverage but warrants monitoring if capex or repayments remain high.
• Cash flow risk: negative levered free cash flow (-CN¥5.87 billion TTM) signals significant outflows for capex or debt service that could pressure liquidity if sustained.

Yunnan Wenshan Electric Power Co.,Ltd. (600995.SS) - Valuation Analysis

• Trailing vs. forward P/E gap (26.39 → 20.06) indicates expected earnings acceleration or analyst upgrades priced in.
• Price-to-sales of CN¥5.00 paired with EV/Revenue 8.08 suggests the market attributes significant value beyond current revenues, likely for stable future cash flows.
• Price-to-book at CN¥1.47 flags modest premium to net assets - supportive for investors seeking asset-backed exposure.
• EV/EBITDA of 12.65 is consistent with utility-sector investors emphasizing predictable EBITDA; not an outsized premium but above deep value levels.

Yunnan Wenshan Electric Power Co.,Ltd. (600995.SS) - Risk Factors

• Levered Free Cash Flow (TTM): -CN¥5.87 billion - negative levered FCF indicates the company is spending more cash than it generates after financing costs, suggesting pressure from capital expenditures, debt servicing, or both.
• Total Debt / Equity: 89.58% - a moderate leverage level that reduces financial flexibility and increases sensitivity to interest-rate movements and refinancing risk.
• Enterprise Value / Revenue: 8.08 - a relatively high valuation multiple versus revenue, which could imply elevated market expectations or limited top-line coverage of the firm's valuation.
• Enterprise Value / EBITDA: 12.65 - a higher EV/EBITDA multiple that may reflect potential overvaluation compared with peers or compressed near-term earnings power.
• Market Capitalization (as of 2025-07-01): CN¥32.06 billion - provides context for absolute size and investor market value.
• Repeated levered FCF note: The levered free cash flow TTM of -CN¥5.87 billion underscores significant capital deployment or debt repayments affecting free cash flow availability.

• Cash-flow and capital structure risks: Negative levered FCF combined with near-90% debt-to-equity suggests constrained ability to fund discretionary investments or absorb shocks without raising new capital or refinancing existing debt.
• Valuation risk: EV/Revenue of 8.08 and EV/EBITDA of 12.65 imply the market is pricing growth or stability that must be delivered; failure to meet expectations could lead to sharp multiple contraction.
• Interest-rate and refinancing exposure: Given the leverage profile, rising interest rates or tightening credit markets would increase interest expense and refinancing costs, exacerbating negative levered FCF.
• Operational and capex pressures: Significant capital spending or project-related outflows could perpetuate negative levered FCF and necessitate equity raises or additional borrowing.
• Market and liquidity considerations: With a market cap of CN¥32.06 billion, large financing needs may dilute existing shareholders or be constrained by market appetite during stressed conditions.

Yunnan Wenshan Electric Power Co.,Ltd. (600995.SS) - Growth Opportunities

• Large-scale pumped storage expansion: second phase of the Meizhou pumped storage station - CN¥4.7 billion capex, 1,200 MW capacity, targeted completion in 2025.
• Operational pumped storage base: 10,280 MW of pumped storage projects already in operation, demonstrating core competency and scale in energy storage.
• Equipment & efficiency upgrades: contract with GE Renewable Energy ~¥150 million for turbine system upgrades to raise operational efficiency and availability.
• Solar generation expansion: 2021 partnership valued at ¥300 million to add 50 MW of solar capacity by 2024, moving toward a more balanced generation mix.
• R&D and local collaboration: ¥50 million allocated in 2022 for joint R&D with local universities on energy technology advancements.
• Site development potential: explicit support from Wuhua government to locate additional pumped storage sites, enabling pipeline growth beyond current projects.