on the evening of March 27, linyang energy (601222) issued an announcement on the sale of shares in its subsidiaries. The announcement indicates that the Company’s wholly owned subsidiary, Linyang New Energy, plans to transfer its 100% equity interest in Qidong Huasheng New Energy Technology Co., Ltd. to Shanghai Datun Energy Co., Ltd. for RMB 421 million. The total transaction value of the project amounts to RMB 2.071 billion. This transaction represents a strategic asset restructuring initiative by Linyang Energy, underscoring the company’s sophisticated capabilities in both PV project development and capital market operations.

According to the announcement, the core asset of this transaction is the Phase I tidal-flat agri-photovoltaic project in Lüsi Sea Area, Qidong City. With a total installed capacity of 400MW (533 MW on the DC side), the project is scheduled to achieve full-capacity grid connection by the end of December 2025. It represents a significant milestone in LinYang Energy’s strategic deployment in offshore and tidal-flat photovoltaic power generation. Based on our calculations, after consolidating the gains and losses from the equity transfer with the profit attributable to the project’s BT contract revenue, the overall profit is expected to exceed 10% of the company’s audited net profit for 2024, and will serve as a significant positive contributor to the company’s operating performance in 2026. Looking back to 2025, Linyang Energy’s performance forecast showed a year-on-year decline, primarily due to a substantial year-over-year drop in power plant sales. The completion of this equity transfer marks a pivotal milestone in the company’s transition of its power plant business from project development to value realization. It also represents a key step in executing Linyang Energy’s strategy to unlock the value of its existing PV assets and focus on the fast-growing energy storage segment. From the perspective of the company’s development, this transaction delivers dual value: it boosts short-term performance while also empowering long-term growth. Upon completion of the transaction, the target company will no longer be consolidated into the company’s financial statements. Project assets previously carried as inventory under the BT model will be fully derecognized, significantly reducing the company’s inventory levels, effectively decreasing capital tied up in inventory, and further optimizing the company’s balance sheet structure. Meanwhile, the cash inflow from the equity transfer will directly replenish the company’s working capital, reduce its debt-servicing pressure, and enhance its financial stability and risk resilience, while also providing critical funding to drive the nationwide expansion of the company’s energy storage business. The strong financial strength and high contract-performance capability of the transaction partner have provided a solid guarantee for the smooth execution of this equity transfer worth RMB 421 million. According to the announcement, the counterparty of this transaction is Shanghai Datun Energy Co., Ltd., which is a listed company on the main board of the Shanghai Stock Exchange. China Coal Energy Holdings, a listed company with A and H shares, is 62.78. In 2024, Shanghai Datun Energy Co., Ltd. recorded operating revenue of RMB 9.488 billion and net profit of RMB 665 million. As of the end of the third quarter of 2025, the company’s total assets amounted to RMB 19.381 billion. It has a sound corporate governance structure, a good credit standing, and no records of dishonesty, demonstrating full capacity to fulfill contractual obligations. More importantly, the two parties have entered into a deep industrial collaboration as part of the transaction. Following the equity transfer, Shanghai Energy will continue to work with LinYang Energy or its affiliates on the operation and maintenance of the target project, as well as on the leased energy storage business, and will re-sign the relevant contracts. This arrangement not only enables the company to sustain industrial operating income and diversify its revenue streams after the equity sale, but also underscores the market’s high regard for LinYang Energy’s expertise in intelligent O&M and energy storage services, thereby achieving a win-win outcome that balances capital exit with strategic industrial partnership. Against the backdrop of cyclical adjustments and track differentiation in the new energy sector, revitalizing existing PV assets while ramping up new energy storage capacity has become LinYang Energy’s clear development strategy. Enterprise investigation information shows that since 2026, the company has intensively registered energy storage related companies in Gansu, Shanxi, Xinjiang, Henan, Ningxia, Hebei and other provinces, which is the embodiment of this strategy. The realization of value from this RMB 2.071 billion photovoltaic BT project has further accelerated the nationwide rollout of energy storage initiatives. According to a company official, the proceeds from this project sale will be primarily reinvested in R&D and project development for the company’s energy storage business. This will help accelerate the rollout of operations by its regional energy storage subsidiaries across multiple provinces, enabling a nationwide, large-scale deployment in the energy storage sector.

The energy storage industry is currently experiencing a golden period of rapid growth, driven by both policy support and market demand. At the domestic level, the "development of new energy storage" will be included in the government work report in 2026. The capacity and electricity price mechanism will be implemented nationwide and subsidy policies will be issued in various provinces one after another. Overseas markets are also experiencing an outbreak. Europe's 100 billion-level climate fund and the United States' AI computing power have driven the expansion of energy storage demand. GW-level projects in emerging markets in Southeast Asia and the Middle East have landed. China's energy storage industry has a stable global market share of 70% and broad space. Against this backdrop, Linyang Energy has seized the opportunities presented by industry development by establishing energy storage subsidiaries across multiple provinces to build a nationwide business footprint. Leveraging the advantages of its PV BT model in terms of capital realization, the company continues to ramp up R&D and project implementation in the energy storage sector, achieving two-way synergy and coordinated development between revitalizing its existing PV asset base and expanding into the growing energy storage market. This strategic approach is solidifying the foundation for the long-term execution of the company’s corporate strategy. Looking ahead, as the company continues to revitalize its existing renewable energy assets and further optimize its asset mix, while simultaneously deepening its technological expertise in the energy storage business and accelerating its nationwide expansion, its core competitiveness and profit quality are expected to improve steadily, thereby delivering consistent and stable investment returns to shareholders.