According to the National Bureau of Statistics, in August, the industrial scale of thermal power in large-scale enterprises changed from a decrease to an increase, the growth rate of hydropower declined, and the growth rates of nuclear power, wind power, and solar power generation accelerated.

Among them, the industrial scale of thermal power in large-scale enterprises increased by 3.7% year-on-year, compared with a decrease of 4.9% in July; the industrial scale of hydropower in large-scale enterprises increased by 10.7%, a decrease of 25.5 percentage points from July; the industrial scale of nuclear power in large-scale enterprises increased by 4.9%, an increase of 0.6 percentage points from July; the industrial scale of wind power in large-scale enterprises increased by 6.6%, an increase of 5.7 percentage points from July; the industrial scale of solar power generation in large-scale enterprises increased by 21.7%, an increase of 5.3 percentage points from July.

In the first half of 2024, the revenue of thermal power operators reached 586.48 billion yuan, a year-on-year decrease of 2.35%, and the net income attributable to the parent company reached 41.47 billion yuan, a year-on-year increase of 42.9%. In the second quarter of 2024, the revenue was 273.05 billion yuan, a year-on-year decrease of 8.4%, and the net income attributable to the parent company was 22.14 billion yuan, a year-on-year increase of 18.0%.

In terms of power generation, the power generation of thermal power in the first half of 2024 was slightly under pressure, but the power generation in different provinces showed obvious differentiation. The power generation in the Jiangsu, Zhejiang, Shanghai, and Anhui regions remained resilient, while the power generation in hydropower basins showed a significant year-on-year decrease. The cost improvement is evident. Taking Q5500 thermal coal as an example, the year-on-year decreases in Qinhuangdao Port, Ningbo Zhoushan Port, and Guangzhou Port in the first half of 2024 were -5.95%, -13.42%, and -12.42%, respectively.

At the same time, the installed capacity of thermal power continues to increase. By the end of July, the investment in thermal power increased by 23.6% year-on-year, and the construction of thermal power accelerated.

According to a research report from HTSC, reviewing the "power shortage" events since 2000, it was found that they have had a significant catalytic effect on power generation equipment stocks and thermal power stocks. China's electricity supply and demand are still in a state of tight balance, and thermal power remains the main force in ensuring supply in the short term. After the completion of the "three 8,000 MW" plan, the future construction of new thermal power capacity will still need to maintain a certain level.

According to estimates, the new approval for thermal power from 2024 to 2027 is expected to remain at a level of 41GW to 57GW. Against the backdrop of power system reform, it is recommended to focus on the medium and long-term electricity prices from the perspectives of primary energy prices, supply and demand, and regional concentration.

Listed Hong Kong stock companies related to thermal power:

China Res Power (00836), Huaneng Power International,Inc. (00902), Huadian Power International Corporation (01071), datang international power generation (00991), etc.