8 Central State-Owned Energy Firms (Sinopec, Three Gorges Energy, Shenhua & More) Launch Market Rescue: Is This a Market-Supporting Operation or Bottom-Fishing Move?

As the A-share market undergoes a correction, central state-owned energy enterprises take collective actions to prop up the market and buy the dip.

The A-share market has seen a pullback, with eight central state-owned energy enterprises taking collective action to stabilize the market while seizing the opportunity to buy undervalued assets.

On the morning of July 20, Wu Qing, Secretary of the Party Committee and Chairman of the China Securities Regulatory Commission, stated at a special symposium for investors that the commission will fully safeguard the stable operation of the market, strengthen supervision over quantitative trading, and push listed companies to increase dividend payouts. On the same day, Sinopec, Three Gorges Energy, China Shenhua Energy, Longyuan Power, GD Power, NARI Technology, SDIC Power, and China Coal Energy — eight central state-owned energy enterprises — simultaneously released official announcements.

This is no coincidence. For these central energy enterprises, are these moves intended to stabilize the market or to bottom-fish?

In the previous half-month, the A-share market underwent a deep correction. During the week from July 13 to 17, the STAR 50 Index fell by 16.93%, the ChiNext Index dropped by 10.78%, and the CSI 1000 Index declined by 12.57%. On July 20 alone, more than 3,700 stocks across the market fell, with over 200 hitting the 10% daily limit down.

The stock market is falling, regulators are taking action, and central state-owned energy enterprises are stepping in. These three events converged on the same day, forming a complete signal chain.

According to the statistical scope of the *2025 China Energy Listed Companies Sustainable Development (ESG) Evaluation Report*, there are a total of 632 listed companies in the energy sector, accounting for a significant proportion of all A-share listed firms. These enterprises boast massive investment scale, stable cash flow, and are closely tied to national economic and people's livelihoods. Their collective actions triggered immediate market reactions in stock prices: China Shenhua Energy rose by 4.98%, NARI Technology climbed by 6.17%, and China Coal Energy increased by 9.97%. However, what truly merits attention is the complete policy and industrial logic behind these moves.

01 Eight Companies, Four Tools

Taking Action on the Same Day

The eight central state-owned energy enterprises released announcements on the same day, with each adopting distinct measures.

Sinopec opted for the cancellation-oriented share repurchase route. The company implemented its first round of A-share repurchases for this cycle on June 18. As of July 17, it had repurchased a total of 77.9 million shares, accounting for 0.06% of its total share capital, at a total cost of 365 million yuan. All repurchased shares will be canceled, reducing the company's registered capital. Cancellation-oriented repurchases directly reduce the total share capital, passively boosting earnings per share when total profits remain unchanged.

The controlling shareholder of Three Gorges Energy, China Three Gorges Corporation, plans to increase its holdings by 15 billion to 30 billion yuan within 12 months, with no set price range, and will execute the purchases at opportune moments. This is the largest shareholding increase plan among the eight companies.

China Shenhua Energy chose the combination of asset injection and dividend payouts. Its controlling shareholder, China Energy Investment Corporation, will continue to push forward the injection of high-quality assets. The company will maintain its cash dividend frequency in 2026 and continue to conduct interim dividend distributions.

Longyuan Power and GD Power are both under China Energy Investment Corporation, but they have adopted different development paths.

Among them, Longyuan Power has completed the acquisition of equity stakes in eight new energy subsidiaries under the group, with a total installed capacity of 2.0329 million kilowatts. It has committed that annual dividends from 2025 to 2027 will be no less than 30% of its net profit. GD Power has been explicitly designated by the group as the integration platform for conventional energy power generation business, with continued injection of thermal power and hydropower assets.

NARI Technology followed the route of a chairman-proposed share repurchase. Zheng Zongqiang, the company's chairman, proposed on July 19 to repurchase shares worth 500 million to 1 billion yuan.

The controlling shareholder of SDIC Power, SDIC Group, plans to increase its holdings by 150 million yuan within six months. The controlling shareholder of China Coal Energy, China Coal Group, plans to increase its holdings by 50 million to 100 million yuan within 12 months.

The eight companies used four tools: repurchase and cancellation, shareholder shareholding increase, asset injection, and dividend commitment. Their goal is consistent: to convey confidence to the market.

It is understood that the total upper limit of newly added repurchase and shareholding increase plans on the Shanghai and Shenzhen stock exchanges has exceeded 15.7 billion yuan. Central state-owned enterprises are leading the way, followed by private enterprises. China Guoxin Investment has already deployed over 50 billion yuan through special re-lending and supporting funds, while China Chengtong Holdings has cumulatively purchased nearly 10 billion yuan worth of shares.

With the two state-owned capital operation platforms taking the lead, followed by industrial central enterprises — a layered market stabilization pattern of "platforms acting first, industries following" has taken shape.

Central state-owned energy enterprises are at the forefront of this round of actions.

02 Market Stabilization or Bottom-Fishing?

So, are these collective moves by central state-owned energy enterprises intended to stabilize the market or to bottom-fish?

Before answering this question, let's look at two sets of data.

On July 20, the eight central state-owned energy enterprises released their announcements simultaneously. Sinopec carried out repurchase and cancellation, the major shareholder of Three Gorges Energy increased its holdings by 15 billion to 30 billion yuan, China Shenhua Energy committed to asset injection and dividend payouts, and the chairman of NARI Technology proposed a 500 million to 1 billion yuan share repurchase. On that day, China Shenhua Energy rose by 4.98%, NARI Technology climbed by 6.17%, and China Coal Energy increased by 9.97%.

However, on the same day, the power sector as a whole fluctuated downward, with Hunan Development and Hangzhou Thermal Power hitting the 10% daily limit down. The oil and gas sector fell in early trading, with Taishan Oil & Gas dropping by more than 8%. Severe internal differentiation emerged within the energy sector.

Therefore, Yujian Energy believes that market stabilization is the visible front line, while bottom-fishing is the hidden back line. Both exist simultaneously, with different logics and targeting different companies.

Market stabilization is the policy-driven visible front line.

This line is the clearest.

Before July 20, the A-share market had experienced a deep correction. During the week from July 13 to 17, the STAR 50 Index fell by 16.93%, the ChiNext Index dropped by 10.78%, and the CSI 1000 Index declined by 12.57%. Market sentiment was sluggish, and panic selling spread across the market.

On the same day, Wu Qing chaired an investor symposium, vowing to fully maintain the stable operation of the market. The two state-owned capital operation platforms, China Guoxin Investment and China Chengtong Holdings, had cumulatively invested nearly 60 billion yuan. The eight central state-owned energy enterprises simultaneously released their announcements.

The high degree of synchronization in timing indicates that these are not spontaneous market behaviors by individual companies. The policy chain is clearly visible: regulators' public statements → state-owned capital platforms entering the market → industrial central enterprises following up.

The top leaders of central state-owned energy enterprises are fully aware of their roles. Ma Yongsheng, then Chairman of Sinopec Group, once publicly stated that "boosting capital market confidence and stabilizing market expectations is an unshirkable responsibility of central state-owned listed companies." This is not a matter of "willingness or not" — the weight of market value management assessment now accounts for 20% to 25% of the annual performance evaluation for senior executives, directly linked to their compensation and job positions.

From this perspective, the collective actions of the eight central state-owned energy enterprises are first and foremost aimed at market stabilization. When the market is in panic, they use real money to tell the market that "someone is buying." The immediate effects of repurchases and shareholding increases also prove this point — on the day of the announcements, the stock prices of all eight companies rebounded across the board.

However, if the only goal was market stabilization, why did different companies choose such drastically different tools? Sinopec implemented cancellation-oriented repurchases, Three Gorges Energy had its major shareholder increase holdings, China Shenhua Energy made asset injection commitments, and NARI Technology's chairman proposed a share repurchase — different tools, different intensities, and different timelines.

This shows that in addition to the "unified action" political directive, another logic is at play.

Bottom-fishing is the hidden back line based on value judgment.

This line is hidden behind the announcements.

First, let's look at Sinopec. On July 21, Sinopec's stock price was 5.24 yuan per share, with a price-to-book ratio of only 0.76. This means the company's stock price is lower than its net asset value per share, in a state of "trading below net asset value."

At the same time, institutions predict its 2026 earnings per share will reach 0.38 yuan, a year-on-year increase of 45.04%. Its first-quarter net profit was 17.006 billion yuan, up 28.21% year-on-year. While its performance is growing, its stock price is below net asset value. This cancellation-oriented repurchase directly reduces total share capital, and with growing profits, earnings per share are doubly boosted.

Next, let's look at China Shenhua Energy. It closed at 46.14 yuan on July 20, with a dynamic price-to-earnings ratio of 22.93x. Institutions predict its 2026 earnings per share will be 2.73 yuan, with a net profit of 57.801 billion yuan, and a price-to-book ratio of 1.85. The company has committed to continue promoting asset injection and interim dividend payouts. For a leading coal enterprise with stable annual dividends and abundant cash flow, this valuation is not expensive.

The same applies to China Coal Energy. It hit the 10% daily limit up and closed at 13.79 yuan on July 20. Institutions predict its 2026 earnings per share will be 1.55 yuan, a year-on-year increase of 14.81%. Its dynamic price-to-earnings ratio is around 10x. For a coal enterprise with a net profit exceeding 20 billion yuan and still growing, this price provides sufficient safety margin.

Then there's NARI Technology. As a leading enterprise in power informatization and smart grids, NARI Technology's growth logic is completely different from traditional energy companies. Chairman Zheng Zongqiang proposed a 500 million to 1 billion yuan share repurchase — for a company with a market value of 190 billion yuan, this repurchase amount is not large, but the chairman's direct proposal, which minimizes the decision-making chain, sends a very strong signal.

Different companies are doing different things. Sinopec repurchases and cancels shares when trading below net asset value — this is typical value investment logic: the company believes its stock price is severely undervalued.

China Shenhua Energy and China Coal Energy commit to asset injection and dividend payouts at reasonable valuations — this tells the market "I am worth this price, and I will be even more valuable." NARI Technology proposes a repurchase when growth stock valuations are under pressure — this tells the market "my growth logic remains unchanged."

Putting these two lines together, the collective actions of the eight central state-owned energy enterprises have a more complete explanation.

Market stabilization is a "must-do" task. Policy requirements, assessment pressures, and market stability — these are unshirkable responsibilities for central state-owned energy enterprises. The collective announcements on July 20 are first and foremost a response to this responsibility.

Bottom-fishing is a "worth-doing" task. Sinopec trading below net asset value, China Shenhua Energy's reasonable valuation, China Coal Energy's growing performance — buying or repurchasing shares at these prices is cost-effective for the company's long-term value. The top leaders of central state-owned energy enterprises are not just "following orders"; they are also making decisions based on their professional judgment.

The two are not contradictory. On the contrary, it is precisely because central state-owned energy enterprises have excellent asset quality, stable cash flow, and valuation safety margins that they can both fulfill their political task of market stabilization and make a profitable transaction.

Three Gorges Energy's shareholding increase plan spans 12 months, China Coal Energy's shareholding increase period is 12 months, and Sinopec's repurchase is still ongoing.

These moves are not short-term "face-saving projects" lasting a day or two, but continuous capital injections. If the only goal was market stabilization, the work could be finished after the announcements. However, the 12-month shareholding increase plan shows that major shareholders truly believe the current price offers long-term holding value.

For what central state-owned energy enterprises are doing, market stabilization is the surface, while bottom-fishing is the core. Political tasks and value judgments converged on July 20, forming the complete logic behind this round of collective actions.

03 What Is Happening in the Energy Industry

If we broaden our perspective, 2026 marks the opening year of the 15th Five-Year Plan, and it is also the last five-year planning period before China achieves its carbon peak target by 2030. Three structural changes are taking place in the energy industry.

The first change is the shift from scale expansion to quality and efficiency improvement.

At the industry level, new energy installed capacity has reached a considerable scale, and the transformation of traditional energy sources has entered a stable period. The peak of capital expenditure is passing. Cash flow is shifting from "being invested out" to "being available for distribution."

For example, after combining cash dividends and share repurchases in 2025, Sinopec achieved a profit distribution ratio of 81%. Longyuan Power has distributed a total of 7.337 billion yuan in cash dividends since its A-share listing.

This is not a choice made by individual companies, but a sign that the entire industry has entered a new stage.

The second change is the shift from single-category development to systematic integration and coordination.

The asset integration direction of China Energy Investment Corporation is very clear: new energy assets will be concentrated in Longyuan Power, conventional energy power generation assets in GD Power, and coal and comprehensive energy assets in China Shenhua Energy.

The past pattern of repeated investment and homogeneous competition among different subsidiaries of central state-owned enterprises is being broken. Under a single holding group, a pattern of division of labor and collaboration is taking shape, with clearer asset boundaries and a more straightforward valuation logic.

The third change is the shift from "financing seekers" to "return providers."

Over the past decade, the main theme of the energy industry has been expansion: increasing installed capacity, deploying new energy sources, and upgrading technologies. Capital expenditure has remained high, with dividends and repurchases taking a back seat. This logic is now changing.

China Shenhua Energy has committed that annual cash dividends will be no less than 65% of its net profit. When a company starts large-scale share repurchases and cancellations, and commits to stable dividends, it is sending a signal: I no longer need so much money for expansion, and I can return capital to investors.

These three changes are superimposed, pointing to the same direction: central state-owned energy enterprises are transforming from "builders" to "operators." With clear asset boundaries and a well-defined return mechanism, the valuation logic can be reconstructed.

Yujian Energy believes that the collective announcements released on July 20 are, in the short term, market stabilization actions, and in the long term, a way for central state-owned energy enterprises to reintroduce themselves to the market. They use repurchases and shareholding increases to convey short-term value to the market, and use asset restructuring and dividend commitments to convey long-term value.

This article is from the WeChat official account "Yujian Energy", written by Wang Mengjiao, and

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