The Zhitong Finance App learned that Guolian Securities released a research report saying that in the context of electricity reform, the profitability of various power supplies has been growing steadily, and operators are moving towards utilitarianization. In terms of thermal power, performance was restored. Profit in the first half of the year increased at the same level as the scale. Cost improvements may increase the profitability of thermal power throughout 2024. Spot scarce electricity prices+capacity electricity price recovery costs+ancillary service compensation promote more stable thermal power earnings. In terms of new energy, revenue grew with scale, and profits were pressured by consumption. The consumption problem was then gradually resolved, and the environmental value of new energy electricity prices is expected to be highlighted. In terms of hydropower and nuclear power, profit attributes are stable, and dividend asset attributes are outstanding. Since the first half of the year, hydropower has benefited from abundant water, and high performance, depreciation costs+interest costs have been reduced, and profits have gradually been released. In terms of nuclear power, the National Assembly approved 11 new nuclear power units in August 2024. The boom in nuclear power is expected to continue, and the growth of nuclear power operators can be expected.

Electric power industry: The industry had the highest growth rate, and the trend is basically positive

By the end of August, there were 6 industries that had risen exponentially according to the CITIC industry classification of 30 industries. Among them, the power and utilities industry had an overall increase of 6.8%, ranking 6th. Generation side: thermal power, hydropower, and nuclear power generation capacity was +0.5%/+24.5/ +0.8%, respectively; electricity consumption: 2024M1-M7 The cumulative electricity consumption of the entire society was about 5.6 trillionkWh, an increase of 7.7% year on year, and electricity demand was improving.

Thermal power; performance recovery, profit and scale increase

2024H1 thermal power operators achieved revenue of 586.48 billion yuan, -2.35% year-on-year, and realized net profit to mother of 41.47 billion yuan, or +42.9% year-on-year. In 2024Q2, revenue was 273.05 billion yuan, -8.4% year over year, and net profit to mother was 22.14 billion yuan, or +18.0% year over year. On the power generation side, there is a slight pressure on the 24H1 thermal power generation side, but the thermal power generation is clearly differentiated between provinces. The power generation in Jiangsu, Zhejiang, Shanghai, and Anhui regions are highly resilient, and power generation in the hydroelectric current domain has declined significantly over the same period last year. There was a significant improvement on the cost side. Taking Q5500 thermal coal as an example, Qinhuangdao Port/ Ningbo/ Guangzhou Port 2024H1 had year-on-year declines of -5.95%/-13.42%/-12.42%, respectively. At the same time, the installed scale of thermal power continued to increase. By the end of July, investment in thermal power was +23.6% year-on-year, and thermal power construction accelerated.

New energy: revenue grows with scale, and profits are pressured by consumption

2024H1 New Energy Operators achieved revenue of 65.92 billion yuan, +3.1% YoY, and realized net profit to mother of 14.24 billion yuan, or -11.1% YoY. 2024Q2 achieved revenue of 30.7 billion yuan, -1.3% YoY, and realized net profit to mother of 6.25 billion yuan, or -22.4% YoY. Revenue increased with the scale of installed capacity. 2024M1-M7 and wind power/photovoltaics added 29.91/123.53 million kilowatts of installed capacity, which were +13.68%/+27.14% year over year, respectively, and PV added 123.53 million kilowatts. Affected by consumption, the number of hours used was pressurized by 2024M1-M7, and the cumulative number of hours used by wind power/photovoltaics decreased by 123/40 hours, respectively.

Hydropower and nuclear power: steady profits, prominent core asset attributes

2024H1 hydropower operators achieved revenue of 90.53 billion yuan, +8.3% year-on-year, and net profit to mother of 24.02 billion yuan, or +25.6% year-on-year. In 2024Q2, hydropower operators achieved revenue of 48.91 billion yuan, +12.3% year-on-year, and realized net profit of 15.07 billion yuan to mother, +28.7% year-on-year. The 2024H1 nuclear power operator achieved revenue of 76.82 billion yuan, +1.7% year over year, and realized net profit to mother of 12.99 billion yuan, or -0.1% year over year. Nuclear power operators achieved revenue of 39.65 billion yuan in 2024Q2, +0.7% year-on-year, and realized net profit to mother of 6.33 billion yuan, or -2.5% year-on-year. Since the first half of the year, hydropower has benefited from abundant water, and high performance, depreciation costs+interest costs have been reduced, and profits have gradually been released. In terms of nuclear power, the National Assembly approved 11 new nuclear power units in August 2024. The boom in nuclear power is expected to continue, and the growth of nuclear power operators can be expected.

Investment advice: Electricity asset profits are stabilizing and growing

In the context of electricity reform, the profitability of various types of power supplies has been growing steadily, and operators are moving towards utility attributes. In terms of thermal power, cost improvements may increase the profitability of thermal power throughout 2024. Spot scarce electricity prices+capacity electricity price recovery costs+ancillary service compensation promote more stable thermal power returns. It is recommended to focus on Zhejiang Electric Power (600023.SH) and Anhui Energy (000543.SZ). In terms of new energy, the consumption problem is gradually being solved, and the environmental value of new energy electricity prices is expected to be highlighted. It is recommended to focus on Three Gorges Energy (600905.SH) and Jiangsu Xinneng (603693.SH). In terms of hydropower and nuclear power, profit attributes are stable, and dividend asset attributes are prominent. It is recommended to focus on China Nuclear Power (601985.SH) and China General Nuclear Power (003816.SZ). Risk warning: 1) Approval or installation progress falls short of expectations 2) Fluctuations in market-based electricity prices 3) Changes in coal prices and installed costs