Jinwu Finance News | The National Securities International Research Institute pointed out that recently, under the overall organization of the National Energy Administration, the China Electricity Council and more than 20 related entities including the State Grid, Southern Grid, and major power generation groups jointly compiled the "Blue Book," which systematically summarizes the achievements of China’s Electrical Utilities market construction and deeply analyzes the situation and challenges.

The bank indicated that the "Blue Book" clarifies the collaborative operation of the provincial electricity market, regional electricity market, and inter-provincial electricity market, with the goal of achieving nationwide allocation of electrical resources. It aims to deepen the electrical energy market, auxiliary services market, and explore markets for electricity capacity, transmission rights, and electricity Futures. The operation of the electrical energy market will deepen, with mid- to long-term electricity Trades extending both longer and shorter cycles, starting continuously on working days, and promoting the construction of the electricity spot market. Through market prices, the price of electrical energy will be reflected, returning electricity to its commodity attributes. The auxiliary services market will reflect the value of auxiliary services. The return of electricity's commodity attributes is beneficial for ensuring the profit levels of power generation companies.

The bank stated that the release of the "Blue Book" clarifies the development path and key tasks for building a unified national electrical market. Through the market, value will be discovered, and electricity will return to its commodity attributes, which is conducive to ensuring reasonable returns for electricity companies. The entry of new energy into market Trades has accelerated compared to previous expectations, with reasonable return enhancement policy expectations for new energy Electrical Utilities operators entering the market. Currently, the overall valuation of Hong Kong stock electrical operator Sector remains relatively low, with several Stocks yielding over 6%. The bank suggests that investors pay attention to undervalued high-dividend quality Electrical Utilities operators like CHINA RES POWER (00836) and quality new energy Electrical Utilities companies such as CHINA LONGYUAN (00916) and CHINA SUNTIEN (00956).