According to the Zhitong Finance APP, Electric Power stocks saw a widespread increase today. As of the time of writing, Huadian Power International Corporation (01071) rose by 2.4% to HKD 3.84; CGN POWER (01816) increased by 1.82% to HKD 2.79; CHINA POWER (02380) went up by 1.29% to HKD 3.15; CHINA RES POWER (00836) climbed 1.28% to HKD 19.04.

Huayuan Securities pointed out that from the national document "National Unified Electric Power Market Development Plan Blue Book", the marketization process may accelerate by 2025, emphasizing reasonable returns on the generation side in the pricing mechanism. Currently, key provinces like Jiangsu, Guangdong, and Zhejiang have released their 2025 Electric Utilities Trade plans. Compared to the 2024 plans, Jiangsu, Zhejiang, and Guangdong will maintain a high proportion of medium- and long-term trading in 2025, gradually converging; and they will promote the entry of all power sources into the market through a customized electricity pricing mechanism.

Changjiang Securities pointed out that the valuations of thermal power central enterprise listed companies have already fallen to near the lower quartile over the past two years. The dividend yields of hydropower stocks have also reached the median of the past two years compared to government bond yields, indicating that the Industry's valuations are already sufficiently attractive. Moreover, as long-term contract prices gradually settle, the valuation suppression factors of the Sector will also be cleared over time. Under the currently high cost base, thermal power is expected to continue to recover profits in the next two quarters, while Nuclear Power profits will continue to improve with the commissioning of new units. Green electricity is likely to enter a new policy catalysis period. Therefore, overall, we believe that the current value of the public utility Sector is already sufficiently attractive, reaffirming the importance of value in Industry allocation.