It was learned through the Zhitong Finance APP that since June 8, the Central Meteorological Observatory has issued high temperature warnings for 8 consecutive days. Yesterday's message from the Zhengzhou Meteorological Bureau stated that on the 13th, most of Zhengzhou city experienced high temperature weather of over 40 ℃ during the day. Tianfeng Securities previously pointed out that by comparing the excess returns of various concept indexes and the SSE Composite Index in summer, and considering the background of tight power supply in summer, it is expected that power supply guarantee, flexible load side regulation may be a race to watch in the electrical utilities sector. Relevant concept stocks: China Res Power (00836), Huadian Power (01071), Datang Renew (01798), Huaneng Power (00902).

At 6:00 a.m. today, the Central Meteorological Observatory continued to issue a yellow high temperature warning for June 14th: It is expected that there will be high temperature weather of 35-36℃ in southern Xinjiang Basin, Turpan Basin, southern Shanxi, central and southern Hebei, central and western Shandong, most of Anhui, central and northern Jiangsu, most of Hubei, northwest Hunan, eastern and northern Sichuan Basin, and northern Hainan Island during the day of June 14th. Since June 8th, high temperature warnings have been issued for 8 consecutive days.

This high temperature period has a long duration and a wide range of influences. Many places have launched specific measures to guarantee energy supply during peak summer demand. In the southern region, Shenzhen Power Supply Bureau's cumulative power supply this year has exceeded 40 billion kilowatt-hours, an increase of more than 10% year-on-year. To cope with the early arrival of the summer peak, Shenzhen Power Supply Bureau has built and commissioned 9 substations with a new capacity of 2.6 million kVA, which is 140% of the same period last year.

Overseas, with the soaring temperature, India's peak power demand has set a new record. India's electricity consumption growth rate has become the fastest in the world. The data released by India's state-owned enterprise Grid Controller of India on Thursday showed that the maximum power demand in the country on May 29th was 246 GW. This exceeds the record of 243.3 GW set in September last year.

Previously, the National Energy Administration released the latest data, which showed that the national electricity consumption in the first quarter of this year reached as high as 2.34 trillion kilowatt-hours, indicating the vigorous economic activity and the sustained strong demand for energy. Zhang Xing, Deputy Director-General of Comprehensive Department of the National Energy Administration and Spokesperson, stated at a press conference that it is expected that during the summer of this year, the national electricity load will continue to increase rapidly, and the highest load will increase by more than 100 million kilowatts year-on-year, putting some pressure on power supply guarantee.

Based on comprehensive analysis, during this year's peak summer period, the overall power supply in the country is guaranteed, but there may be electricity supply shortages in some provinces in Inner Mongolia, East China, Central China, Southwest, and southern regions during peak hours. If extreme or catastrophic weather occurs, the situation of power supply shortage may further intensify.

According to the "Analysis and Forecast Report on the National Power Supply and Demand Situation for the First Quarter of 2024" published by the State Grid Corporation of China, the report predicts that the total national electricity consumption in 2024 will be 9.8 trillion kilowatt-hours, an increase of about 6% compared to 2023, and the total national electricity consumption in the first half of the year will grow slightly faster than 8% year-on-year.

Cinda Securities believes that after experiencing multiple rounds of tension between supply and demand in the power sector, the power sector is expected to usher in profit improvement and value re-evaluation. In the situation of tension between power supply and demand, the peak value of coal-fired power generation is highlighted; under the continuous promotion of electricity marketization reform, the trend of electricity prices is expected to rise slightly, and the spot electricity market and auxiliary service market mechanisms are expected to continue to be promoted, while the capacity electricity price mechanism is officially launched, clarifying the status of coal-fired power generation. The construction of the new power system under the dual-carbon target may continue to rely on the richness and investment of system regulation means. In addition, with the State Development and Reform Commission increasing the supply of coal electricity, the actual performance rate of coal electricity long-term contracts is expected to rise marginally, and the bank judges that the cost side of coal-fired power generation enterprises is relatively controllable.

Galaxy Securities previously pointed out that the electricity industry is expected to continue to benefit in the future under the background of China's energy structure adjustment and state-owned enterprise reform, thus further stabilizing and improving its long-term investment value. Especially under the promotion of state-owned enterprise reform, electricity enterprises will create higher returns for investors through resource integration, management optimization, and efficiency improvement. CICC also pointed out that the Hong Kong-listed thermal power companies released their 2023 annual reports, with performance meeting expectations; the core profit cash flow of the industry significantly repaired, auxiliary service income cashed in, and dividend payout ratio increased. It is bullish on the decline of coal prices in 2024 and the double-click of thermal power to welcome Davis.

Related concept stocks:

China Resources Power: On January 19, China Resources Power announced on the HKEx that the cumulative electricity sales of its subsidiary power plants reached 193 million megawatt-hours in 2023, an increase of 4.7% year-on-year. Among them, the cumulative electricity sales of its subsidiary wind farms reached 39.61 million megawatt-hours, an increase of 12.4% year-on-year; the cumulative electricity sales of its subsidiary photovoltaic power stations reached 2.86 million megawatt-hours, an increase of 111.8% year-on-year.

Huadian Power: At the end of 2023, Guotai Junan released a research report stating that considering the stability of Huadian International Electric Power's coal and power operations and the expected continuous growth of equity installed capacity, it raised the company's EPS attributable to ordinary shareholders for 2023-2025 to RMB 0.57/0.64/0.71 yuan (original value of RMB 0.52/0.61/0.65 yuan), and the current stock price corresponds to a PE (2023E) of 5.5 times. It maintains a target price of HKD 5.30 and a "shareholding" rating.

Datang Renewables: Recently, it released an announcement stating that as of December 31, 2023, the Group's cumulative power generation in 2023 reached 31.6078 billion kilowatt-hours, an increase of 9.80% year-on-year compared with 2022. Among them, the wind power generation completed was 29.1854 billion kilowatt-hours, an increase of 7.44% year-on-year compared with 2022; the photovoltaic power generation was 2.4224 billion kilowatt-hours, an increase of 49.22% year-on-year compared with 2022.

Huaneng Power International: According to the company's preliminary statistics, in the fourth quarter of 2023, the company's various operating power plants in China completed a power generation of 110.476 billion kilowatt-hours according to the merged report caliber, an increase of 5.18% year-on-year; in 2023, the company's various operating power plants in China completed a cumulative power generation of 447.856 billion kilowatt-hours according to the merged report caliber, an increase of 5.33% year-on-year; in 2023, the average on-grid settlement electricity price of the company's various operating power plants in China was RMB 508.74 per megawatt-hour, a year-on-year decrease of 0.23%. In 2023, the proportion of the company's market-oriented transaction electricity volume was 88.40%, the same as last year.