公用事业行业：消化分歧走向一致，重视公用红利价值

Investment Rating - The report maintains a "Positive" investment rating for the public utility sector [5]. Core Insights - The public utility sector has seen adjustments since the second half of the year, but current valuations for thermal power companies are near the lower quartile of the past two years, indicating sufficient attractiveness for investment. The dividend yield for hydropower stocks has reached the median level of the past two years, suggesting that the sector's valuation is appealing. With the gradual implementation of long-term electricity prices, the valuation pressure on the sector is expected to ease [2][5]. - Thermal power is anticipated to continue its recovery in profitability over the next two quarters, while nuclear power is expected to improve due to new unit production. Green energy is likely to experience new policy catalysts, reinforcing the overall attractiveness of the public utility sector [2][5]. Summary by Sections Thermal Power - The marginal expectations for thermal power are converging, with profitability supporting value recovery. As of December 6, the PB valuation percentiles for major thermal power companies are at 5.36%, 24.02%, and 34.02%, indicating a return to near two-year lows. The current valuations reflect market expectations for weak electricity prices, but actual profitability has shown some recovery this year, with national power generation companies reporting earnings of only 1.5 to 3.0 cents per kilowatt hour. The long-term contracts for electricity are expected to alleviate valuation pressures as they are finalized [5][5]. - The average price of coal has decreased, with the Qinhuangdao port Q5500 coal price dropping to 812 RMB/ton, and the average for the fourth quarter at 840.22 RMB/ton, down 117.47 RMB/ton year-on-year. This suggests that thermal power performance is likely to improve in the fourth quarter [5]. Hydropower and Nuclear Power - Hydropower is viewed as a stable profit asset, with its dividend yield becoming increasingly attractive. The spread between the expected dividend yield of major hydropower companies and the 10-year government bond yield has expanded to 1.85%, indicating strong appeal for dividend assets. The nuclear power sector is also seeing reduced pressure on electricity prices, with clearer expectations for profitability following the announcement of annual electricity trading plans in Jiangsu and Guangdong provinces [5][5]. Green Energy - The issuance of green certificates has reached new highs, with 1.232 billion certificates issued in October alone, marking a significant increase in the market. The total number of certificates issued from January to October reached 3.331 billion, accounting for 93.81% of the total since records began. Although the trading volume of green certificates remains low, the significant increase in issuance is expected to support the pricing of renewable energy [5][5]. Investment Recommendations - The report emphasizes the importance of the "carbon neutrality" era and the ongoing electricity market reforms throughout the 14th Five-Year Plan period. It suggests that the intrinsic value of electricity operators will be fully reassessed, recommending attention to quality thermal power companies such as China Resources Power, Funiu Co., Huadian International, Guodian Power, China Power, Huaneng International, and operators in the Yangtze River Delta. For hydropower, it recommends companies like Yangtze Power, Guotou Power, and Huaneng Hydropower. In the renewable energy sector, it suggests companies like Longyuan Power, Zhongmin Energy, China Nuclear Power, and Three Gorges Energy [5][5].