With the strengthening of the country's medium and long-term electricity price policy, the thermal power industry has ushered in an opportunity to repair the low valuation. Recently, the ** Energy Bureau requires the signing of medium and long-term power contracts for 2024 to be completed by December 20, and encourages the model of "coal power and new energy joint operation". This policy will accelerate the signing of electricity tariffs and provide guarantees for the annualized quarterly performance of thermal power companies.
In terms of the electricity market, the electricity consumption of the whole society increased by 11 year-on-year in November6%, of which the electricity consumption of the secondary industry was in line with expectations, and the electricity consumption of the tertiary industry and residents was better than expected. In terms of power generation, hydropower increased by only 5% year-on-year due to the impact of entering the dry season4%, thermal power increased by 6 year-on-year3%, showing the important position of thermal power in the electricity market. At the same time, wind and solar power generation increased year-on-year. 4%, providing more clean energy to the electricity market.
Looking ahead, the publicization of utilities will be the direction of interpretation in 2024. With the acceleration of electricity reform, hydropower, as a benchmark for public utilities, will maintain the joint dispatch of energy storage to increase profitsThermal power will gradually stabilize its profitability with the reform;Nuclear power installations are accelerating, earnings are stable and dividend yields are expected to rise. The earnings stability and valuation system of all power sectors are moving towards true utility.
In this context, we recommend paying attention to companies such as Huaneng International, Huadian International, Guodian Power, Shenergy, Inner Mongolia Huadian and Yangtze Power. These companies have a high market share and competitiveness in the electricity market, and are expected to benefit from the implementation of electricity price contracting and the trend of utility.
With the implementation of policies and changes in the market, the thermal power industry is expected to usher in opportunities for the repair of low valuations, and the trend of public utilities will also bring more investment opportunities to investors.
Note: The data and opinions in this article are provided by GF Public Utilities and are for reference only.
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