Abstract Since the new round of power system reform, the pace of power market construction has accelerated, and the scale of power market-based transactions has grown rapidly. The fierce marketization competition has continuously reduced the on-grid electricity price of thermal power. Now the thermal power enterprises are facing a severe test of operating conditions. Based on the panel data of several listed thermal power companies in Shanghai and Shenzhen in recent three years, this paper uses three-stage DEA model to analyze the input-output efficiency of thermal power enterprises. The research shows that the input of listed thermal power companies increases year by year, while their output decreases. The comparison of the first and third stages of the DEA model shows that the first stage overestimates the scale efficiency of this type of power generation company and underestimates the pure technical efficiency. Based on the research results, this paper puts forward the development suggestions for thermal power enterprises to keep up with the reform of China’s power market and improve their business conditions.