Shenwan Hongyuan Securities·2025-04-02 14:14Investment Rating - The report gives an "Overweight" rating for the public utility sector, indicating a positive outlook for the industry compared to the overall market performance [2][12]. Core Insights - The report discusses the recent issuance of the "Opinions on Improving Price Governance Mechanisms," emphasizing the need for market-driven pricing in various sectors, including electricity, gas, and water [2]. - It highlights the ongoing market-oriented reforms in public utilities, suggesting that the pricing mechanisms are expected to be further streamlined, which will enhance the efficiency of resource allocation [2]. - The report identifies the importance of breaking down price transmission barriers to promote a sustainable pricing mechanism in public utilities, particularly in the context of dynamic adjustments for residential utility prices [2]. - It emphasizes the establishment of pricing policies that support green and low-carbon energy transitions, suggesting that the environmental value of green electricity is likely to accelerate [2]. Summary by Sections Market Reform and Pricing Mechanisms - The report notes significant achievements in market-oriented pricing in the electricity and gas sectors, with coal power fully marketized and green electricity set to enter the market soon [2]. - It mentions the need for a dynamic adjustment mechanism for public utility prices, particularly for residential water, electricity, and gas, to stabilize supply and improve profitability [2]. Investment Recommendations - For hydropower, companies like Yangtze Power, Guotou Power, and Chuanwei Energy are recommended due to their potential for increased output [2]. - In the green energy sector, companies such as Xintian Green Energy and Funiu Co. are highlighted for their stable profitability post-marketization [2]. - Nuclear power companies like China National Nuclear Power and China General Nuclear Power are recommended based on their growth potential [2]. - For thermal power, companies like Shenneng Co. and Huadian International are suggested due to favorable pricing policies [2]. - In the natural gas sector, companies like New World Energy and Hong Kong and China Gas are recommended for their recovery in profitability [2]. - Water utility companies such as Xingrong Environment and Yuehai Investment are expected to benefit from improved pricing mechanisms [2].