According to the Zhitong Finance app, electrical utilities stocks fell collectively. At the time of publication, China Res Power (00836) fell 3.93% to HKD 23.25; Huadian Power International Corporation (01071) fell 3.42% to HKD 4.52; and Huaneng Power International, Inc. (00902) fell 1.58% to HKD 5.6.

HTSC pointed out that the thermal power generation output slightly increased in the second quarter, while coal prices fell both annually and quarterly. However, electricity prices have also slightly decreased in YoY, and there was a tax deduction due to historical losses brought by the same period of last year. As a result, the thermal power performance may be under pressure on a YoY basis. Considering that there was a tax deduction due to historical losses in the same period last year, and the electricity price will slightly decrease on a YoY basis, and the coal consumption will increase on a quarterly basis after the stop of heating supply in the second quarter, we believe that the profit growth rate of thermal power in 2Q24 will slow down.

Zijin Tianfeng Futures pointed out that the current hydropower generation is significantly higher than the same period in history. From the current precipitation situation and the forecast of the meteorological department, this year is a year of high hydropower capacity, and the precipitation will be significantly higher than the previous year, reaching an increase of 20-30%, coupled with the rapid growth of new energy fund generation. The proportion of thermal power generation is much lower than the annual average level.