公用事业行业专题研究：十年期国债收益率破2，重视水电板块配置性价比

Investment Rating - The industry rating is "Outperform the Market" (maintained rating) [1] Core Viewpoints - Hydropower is characterized by abundant cash flow and high dividends, making it a typical dividend asset. The ratio of operating cash flow to net profit for Changjiang Electric Power from 2016 to 2023 averaged 1.72 times, indicating that cash flow is significantly higher than accounting profit [14][16] - The recent decline in the 10-year treasury yield below 2% enhances the allocation value of hydropower assets. As of December 16, 2024, the yield was 1.72%, and with the implementation of a moderately loose monetary policy, further declines in yields are expected, which will increase the attractiveness of hydropower as a cash-rich and high-dividend asset [5][39] - The dividend policies of major hydropower companies like Changjiang Electric Power and Huaneng Hydropower are clearly defined, with commitments to distribute at least 70% of net profit as cash dividends from 2021 to 2025 [16][49] Summary by Sections Cash Flow and Dividends - Hydropower operators have cash flows significantly exceeding accounting profits, with Changjiang Electric Power maintaining over 300 billion CNY in operating cash flow even during adverse conditions in 2022. In 2023, the cash flow exceeded 600 billion CNY after consolidating new power stations [14][16] - The dividend distribution plans of hydropower companies are robust, with Changjiang Electric Power committing to a minimum of 70% of net profit for cash dividends from 2021 to 2025 [16][49] Treasury Yield and Market Conditions - The 10-year treasury yield has recently dropped to 1.72%, with expectations for further declines due to a shift to a moderately loose monetary policy. This environment is favorable for hydropower assets, which are seen as stable and high-yielding investments [5][39] - The spread between the dividend yield of Changjiang Electric Power and the 10-year treasury yield has widened, indicating a growing attractiveness of hydropower investments [39] Investment Recommendations - In light of the declining long-term interest rates, the report suggests focusing on hydropower stocks such as Changjiang Electric Power, Huaneng Hydropower, Chuan Investment Energy, and Guotou Electric Power, which are expected to benefit from their stable income characteristics [49]