公用事业：如果煤价快速回落，火电投资机会如何甄别？

Investment Rating - The report maintains a "Positive" investment rating for the public utility sector [6]. Core Insights - The weakening support for coal prices, combined with high inventory levels and weak downstream demand, is expected to lead to a significant reduction in fuel costs for thermal power generation, with an estimated decrease of about 3 cents per kilowatt-hour [9][10]. - Despite a reduction in annual long-term electricity prices in 2025, the decline in prices in regions like Northern China, Anhui, and Shanghai is expected to be less than the decrease in fuel costs, indicating an improvement in thermal power profitability [9][10]. - The valuation of thermal power companies is currently at a low point, with several companies trading near their book value, and the expected dividend yields are attractive, making the sector appealing for investment [9][10]. - There has been an acceleration of capital inflow from southbound funds into the power sector, indicating a growing interest and potential for recovery in the sector [9][10]. - The report emphasizes the importance of the "carbon neutrality" initiative and market reforms in the electricity sector, suggesting that the intrinsic value of power operators will be reassessed during the 14th Five-Year Plan period [9][10]. Summary by Sections - Coal Price Dynamics: Recent trends show a significant drop in coal prices, with the Qinhuangdao port Q5500 coal price at 708 RMB/ton, down 23.62% year-on-year, which will alleviate cost pressures for thermal power generation [9][10]. - Profitability Outlook: The report anticipates that thermal power profitability will improve due to the disparity between long-term electricity price reductions and fuel cost declines [9][10]. - Valuation and Dividend Appeal: The report highlights that major thermal power companies are trading at low price-to-book ratios, with expected dividend yields ranging from 5.80% to 6.75%, making them attractive for investors [9][10]. - Market Sentiment and Fund Flows: There is a notable increase in southbound fund holdings in the public utility sector, indicating a positive shift in market sentiment towards the sector [9][10]. - Investment Recommendations: The report recommends focusing on quality thermal power operators and hydropower companies, as well as those in the renewable energy sector, given the expected improvements in the operating environment [9][10].