Daiwa released a research report stating that the outlook for next year, in order, is nuclear power/coal-fired power/hydropower, with renewable energy coming last. The bank has raised the target price of CGN Power (01816) from 2.1 Hong Kong dollars to 2.9 Hong Kong dollars; and upgraded the rating of China Res Power (00836) from "underperform market" to "hold", due to the easing of bearish factors and a 4% yield.

The bank believes that the hydropower sector is overvalued in the industry and requires a better entry point; the utilization rate of wind power and the reduction in electricity prices are still issues. Daiwa explained that the electric utilities sector has outperformed the overall market in the first three quarters, benefiting from the defensive nature of these stocks under the ongoing "risk-off" sentiment. However, the bank has noticed a clear shift in investor preference towards risk since October. This change in outlook has led to funds flowing out of electrical utilities into other industries, and the bank believes this situation will continue until 2025.