Investment Rating - The report maintains a positive outlook on the power and gas sectors, indicating a favorable investment environment due to policy improvements and market dynamics [1]. Core Insights - The report highlights the recent improvements in the capacity pricing mechanism for power generation, which aims to stabilize revenue and enhance the profitability of various power sources [6][10]. - It notes a slight increase in natural gas consumption in 2025, with a projected growth of 0.1% year-on-year, indicating a stable demand outlook for the gas sector [32]. Summary by Sections 1. Power Sector: Capacity Pricing Mechanism Improvement - The National Development and Reform Commission and the National Energy Administration have issued a notification to enhance the capacity pricing mechanism for power generation, addressing mismatches in supply and demand within the new energy system [6]. - The new mechanism introduces differentiated pricing for various types of regulatory power sources, ensuring that their capacity value is adequately compensated [7]. - A unified compensation standard for peak capacity across different power sources is established, promoting rational investment and resource allocation in the power sector [8][10]. 2. Gas Sector: Continued Growth in Natural Gas Consumption - Natural gas consumption in China is expected to reach 385.7 billion cubic meters by December 2025, reflecting a year-on-year increase of 1.9% [32]. - The report emphasizes the impact of cold weather on gas prices, with global prices remaining high, particularly in the U.S. and Europe, which supports the profitability of gas companies [13][19]. - The report suggests that the gas sector will benefit from a combination of lower costs and improved demand, particularly for city gas companies, with recommendations for several key players in the market [34]. 3. Weekly Market Review - The report notes that the public utility, power, gas, and environmental sectors underperformed relative to the Shanghai and Shenzhen 300 index during the week of January 24 to January 30, 2026 [36]. 4. Company and Industry Dynamics - As of the end of 2025, the total installed power generation capacity in China reached 3.89 billion kilowatts, a year-on-year increase of 16.1%, with significant growth in solar and wind power installations [43]. - The report includes various company announcements, highlighting performance forecasts and operational updates from key players in the energy sector [44].

Group 1 - The core viewpoint of the article indicates a significant decline in power stocks, with Huaneng International (00902) down 5.26% to HKD 5.4, China Resources Power (00836) down 3.48% to HKD 17.18, and Huadian International (01071) down 2.91% to HKD 4.01 [1][1][1] Group 2 - On January 30, the National Development and Reform Commission and the National Energy Administration jointly issued a notice to improve the capacity pricing mechanism for power generation, which includes optimizing the electricity market mechanism [1] - According to CITIC Securities, the notice clarifies that after the improvement of the coal power capacity pricing mechanism, local areas can adjust the lower limit of medium- and long-term market trading prices for coal power based on supply and demand and the variable costs of all participating units [1] - The notice encourages flexible pricing mechanisms between supply and demand parties, which may lead to a further decline in the price center of electricity in some provinces [1]

Core Viewpoint - Power stocks are experiencing a decline, with major companies like Huaneng International, China Resources Power, and Huadian International seeing significant drops in their stock prices due to regulatory changes in the electricity pricing mechanism [1] Group 1: Stock Performance - Huaneng International (600011)(00902) fell by 5.26%, trading at 5.4 HKD [1] - China Resources Power (00836) decreased by 3.48%, trading at 17.18 HKD [1] - Huadian International (600027)(01071) dropped by 2.91%, trading at 4.01 HKD [1] Group 2: Regulatory Changes - On January 30, the National Development and Reform Commission and the National Energy Administration issued a notice to improve the capacity pricing mechanism for power generation [1] - The notice specifies that the coal power capacity pricing mechanism will be refined, allowing local adjustments to the long-term market trading price floor based on supply and demand and operational costs [1] - The notice encourages flexible pricing mechanisms between supply and demand parties, which may lead to a further decrease in electricity price levels in some provinces [1]

Core Viewpoint - The power sector is experiencing a decline, with major companies like Huaneng International, China Resources Power, and Huadian International seeing significant drops in their stock prices following the announcement of a new pricing mechanism for power generation capacity by the National Development and Reform Commission and the National Energy Administration [1] Group 1: Stock Performance - Huaneng International (00902) fell by 5.26%, trading at 5.4 HKD [1] - China Resources Power (00836) decreased by 3.48%, trading at 17.18 HKD [1] - Huadian International (01071) dropped by 2.91%, trading at 4.01 HKD [1] Group 2: Regulatory Changes - On January 30, the National Development and Reform Commission and the National Energy Administration issued a notice to improve the capacity pricing mechanism for power generation [1] - The notice includes provisions for optimizing the pricing mechanisms for coal, natural gas, pumped storage, and new energy storage [1] Group 3: Market Implications - According to CITIC Securities, the notice allows localities to adjust the lower limit of long-term market trading prices for coal power based on supply and demand and the variable costs of all participating units [1] - The notice encourages flexible pricing mechanisms between supply and demand parties, which may lead to a further decline in the price center for coal power in some provinces [1]

Investment Rating - The report suggests a positive outlook for the utility sector, particularly for coal-fired power operators, with a recommendation to focus on quality transformation operators such as Huaneng International, Datang Power, Guodian Power, Huadian International, China Power, China Resources Power, and Funiu Co., Ltd. [7] Core Insights - The report highlights the importance of the capacity compensation mechanism in addressing the long-standing issue of fixed cost recovery in the coal-fired power sector. The implementation of a reliable capacity compensation mechanism is expected to resolve the dual pricing system between long-term contracts and spot market prices, leading to a more balanced electricity market. [2][5][7] - The report anticipates that by 2026, the national capacity supply-demand ratio will reach 84%-96%, with capacity prices ranging from 276 to 316 RMB/year·kW. This is expected to alleviate the downward pressure on long-term contract prices significantly. [7] - The report emphasizes that the introduction of the capacity compensation mechanism will decouple the fixed cost recovery from long-term contract pricing, thus allowing coal-fired power to return to being a public utility. [7] Summary by Sections Introduction - The report discusses the recent announcement by the National Development and Reform Commission regarding the improvement of the capacity price mechanism, which aims to unify various types of regulatory power sources under a new reform initiative. [18] Importance of Capacity Compensation Mechanism - The capacity price is designed to compensate for fixed costs associated with power plants, which include capital costs, fixed operating and maintenance costs, and taxes. This mechanism is crucial for ensuring that power companies can recover their fixed costs effectively. [21][22] International Examples and Domestic Innovations - The report references the PJM capacity market mechanism in the U.S. and the innovative capacity compensation mechanism trialed in Gansu Province, which aims to achieve near-full recovery of fixed costs. [6] Breaking the Profitability Dilemma - The report concludes that if the reliable capacity compensation mechanism is implemented nationwide, it will significantly reduce the profitability challenges faced by coal-fired power plants under the current dual pricing system. [7]

Investment Rating - The report maintains a "Buy" rating for the public utility sector [6] Core Insights - The commercial model of the power sector is continuously transforming, with a reduced reliance on annual long-term contracts for electricity and prices. The sector is shifting towards mid-to-long-term markets, spot markets, and capacity markets, indicating a comprehensive push for marketization [19][3] - The capacity price mechanism is being refined, with the aim to optimize the electricity market and ensure fair compensation reflecting the contributions of different power plants to peak demand [15][3] - The report highlights the importance of capacity market development, with current subsidies in Gansu and Yunnan reaching 330 RMB/kW·year, which helps offset the decline in electricity prices [19][3] Summary by Sections Market Performance - The SW public utility sector index fell by 1.66% this week, ranking 16th among 31 SW sectors. In comparison, the CSI 300 index rose by 0.08%, while the Shanghai Composite Index and Shenzhen Component Index fell by 0.44% and 1.62%, respectively [33][33] - Within sub-sectors, thermal power decreased by 2.78%, hydropower increased by 0.3%, while solar and wind power fell by 4.53% and 2.49%, respectively [33][33] Price Updates - Domestic and imported thermal coal prices have rebounded slightly, with domestic Qinhuangdao port 5500 kcal thermal coal rising by 4 RMB/ton, remaining below 700 RMB/ton. Imported coal prices also saw a slight increase [12][12] - The average clearing price for electricity in Shanxi and Guangdong has significantly increased due to cold weather, while the monthly agent purchase electricity costs are trending upwards due to rising capacity prices and the entry of renewable energy into the settlement cycle [13][12] Key Events - The National Development and Reform Commission and the National Energy Administration issued a notice to improve the capacity price mechanism for power generation, which includes optimizing compensation for coal and gas power generation [3][15] - Recent policy changes include relaxing the annual long-term contract signing ratio for coal-fired power companies and the cancellation of time-of-use electricity pricing in multiple regions [3][15] Recommendations - The report suggests focusing on national thermal power operators such as Huaneng International and Guodian Power, which are expected to maintain stable cash dividends. The profitability of thermal power is anticipated to gradually detach from coal cost dependency, shifting towards multiple influencing factors [19][3] - For long-term stable investment needs, the report recommends attention to companies like Yangtze Power, State Power Investment Corporation, and China National Nuclear Power [19][3]

Investment Rating - The report maintains an "Overweight" rating for the industry, indicating a positive outlook for investment opportunities in the sector [2]. Core Insights - The report discusses the recent issuance of the "Notice on Improving the Capacity Price Mechanism on the Generation Side" by the National Development and Reform Commission and the National Energy Administration, aimed at addressing the challenges in the development of adjustable power sources amid the transition to a new energy system [2]. - The report highlights the need for a refined capacity pricing mechanism to ensure the economic viability of coal, gas, pumped storage, and new energy storage sources, which are essential for balancing the supply and demand of renewable energy [2]. - The report emphasizes the differentiation in capacity pricing for four types of adjustable power sources, aiming to optimize revenue logic and ensure fair competition across regions [2]. - A key breakthrough is the establishment of a unified compensation mechanism for reliable capacity, which standardizes compensation across different types of power generation units based on their peak supply capabilities [2]. - The report suggests that the improved pricing mechanism will stabilize investment expectations in the power sector, ensuring a balance between energy security and the integration of renewable energy [2]. Summary by Sections Capacity Pricing Mechanism - The report outlines the necessity of improving the capacity pricing mechanism to address the issues of supply-demand mismatch and insufficient adaptation of existing mechanisms [2]. - It identifies three major problems with the current system, including declining utilization hours for coal power and the lack of cost constraints for pumped storage pricing [2]. Differentiated Pricing Strategy - The report details the differentiated optimization of capacity pricing for adjustable power sources, allowing local authorities to set prices based on specific factors such as discharge duration and peak contribution [2]. - It introduces a "new and old distinction" strategy for pumped storage, maintaining existing pricing for older plants while implementing a unified pricing mechanism for new projects [2]. Unified Compensation Mechanism - The report introduces a reliable capacity compensation mechanism that standardizes compensation across different generation units, promoting rational investment and resource allocation in the power sector [2]. - This mechanism aims to link revenue to the actual contribution of each type of power generation unit, encouraging efficiency and technological improvements [2]. Investment Recommendations - The report recommends several companies for investment, including coal power companies like Guodian Power and Inner Mongolia Huadian, as well as hydropower companies such as Yangtze Power and State Power Investment [2][3].

Group 1 - Wang Yu has been elected as the employee representative director of Huaneng International Power Co., Ltd. (hereinafter referred to as "Huaneng International") [1] - The election took place during the sixth meeting of the second employee representative congress, and Wang's term will last until the expiration of the eleventh board of directors on January 26, 2026 [1]

Group 1 - Huaneng International's stock price decreased by 2.03% on January 27, trading at 7.24 CNY per share, with a total market capitalization of 113.65 billion CNY [1] - The company experienced a net outflow of 28.25 million CNY in principal funds, with significant selling pressure observed [1] - Year-to-date, Huaneng International's stock has declined by 2.95%, with a 10.51% drop over the past 20 days [1] Group 2 - As of September 30, Huaneng International reported a total revenue of 172.98 billion CNY for the first nine months of 2025, a decrease of 6.19% year-on-year, while net profit attributable to shareholders increased by 42.52% to 14.84 billion CNY [2] - The company has distributed a total of 67.86 billion CNY in dividends since its A-share listing, with 7.38 billion CNY distributed over the past three years [3] - As of September 30, 2025, the number of shareholders decreased by 1.99% to 94,600, with the top ten circulating shareholders including China Securities Finance Corporation and Hong Kong Central Clearing Limited [2][3]

本公司董事会及全体董事保证本公告内容不存在任何虚假记载、误导性陈述或者重大遗漏，并对其内容 的真实性、准确性和完整性承担法律责任。 华能国际电力股份有限公司（"公司"或"华能国际"）股东会已于2025年9月23日审议通过了关于修订 《公司章程》的相关议案。根据修订后的《公司章程》，公司董事会由18名董事组成，其中包括1名职 工代表董事。职工代表董事通过公司职工代表大会、职工大会或者其他形式民主选举产生，无需提交公 司股东会审议。 公司于近日召开第二届职工代表大会第六次会议，选举王钰先生为公司第十一届董事会职工代表董事， 任期自2026年1月26日起至公司第十一届董事会任期届满之日止。王钰先生简历请见本公告附件。 董事会 2026年1月27日 王钰，1972年7月出生。现任华能国际办公室（董事会办公室）主任、华能（浙江）能源开发有限公司 董事、华能石岛湾核电开发有限公司董事。曾任华能国际财务部资金结算中心副主任、主任，资金二处 处长，财务与预算部资金处处长，纪律检查与审计部副主任，法律合规部主任，职工代表监事。毕业于 中国海洋大学项目管理专业，工程硕士。 除上述简历披露的任职关系外，王钰先生与华能国际的董事、高 ...