山西证券：研究早观点-20250227

Market Trends - The report highlights that the electricity spot market is advancing rapidly, with thermal power having a competitive edge due to its higher flexibility in adjusting output based on price fluctuations [4][5] - The ongoing mergers and acquisitions in the power sector are expected to enhance the valuation and profitability of state-owned enterprises, as a significant portion of their power assets remain unlisted [4][5] Thermal Power Sector - The report anticipates cost improvements for thermal power in 2025, with integrated coal and power operations showing higher and more stable return on equity (ROE) compared to non-integrated firms [4] - Companies like China Shenhua, Huaihe Energy, and Xinji Energy have substantial ongoing and planned projects, with operational project ratios of 24%, 132%, and 75% respectively [4] - The transition towards auxiliary services and capacity pricing is expected to stabilize the profitability of thermal power companies, enhancing their utility-like characteristics and boosting valuations [4] Hydropower Sector - The report notes that the expiration of depreciation and declining financial costs will benefit the cost structure of hydropower companies, which typically have high initial investment and depreciation costs [4] - Hydropower companies are expected to maintain high dividend payout ratios, with commitments from companies like Yangtze Power and Guotou Power to distribute dividends of 70%, 55%, and 50% respectively during the 14th Five-Year Plan [4] - The hydropower sector is characterized by its counter-cyclical nature, making it less sensitive to short-term economic fluctuations and electricity price changes, thus presenting high allocation value [4] Investment Recommendations - The report suggests focusing on state-owned enterprise mergers and acquisitions, sustained dividends in a low-interest environment, and integrated coal-power operations as key investment themes for 2025 [4][5] - It projects a national electricity consumption of 10.4 trillion kilowatt-hours in 2025, representing a year-on-year growth of approximately 6% [5] - The anticipated increase in installed power generation capacity to over 3.8 billion kilowatts by the end of 2025, reflecting a growth of around 14% [5]