Huachuang Securities·2025-05-16 06:14Investment Rating - The report maintains a "Buy" rating for the electricity and public utilities sector, focusing on the recovery of thermal power profitability and the catalytic effects of green energy policies [1]. Core Insights - The report highlights the potential for significant profit recovery in the thermal power sector due to declining coal prices, which are expected to enhance profitability for thermal power companies [4][12]. - Water power companies are experiencing growth driven by improved water inflow, with some companies showing substantial profit increases [24][25]. - Nuclear power is facing short-term performance volatility but has long-term growth potential due to new unit installations [40][41]. - Green energy, particularly offshore wind, is anticipated to enter a new growth cycle, while traditional green energy companies are under pressure but may see a restructuring of market order [4][24]. Summary by Sections Thermal Power - Performance: In 2024, companies like Huadian Energy and Datang Power saw significant profit increases of 281.93% and 229.70%, respectively, driven by lower coal costs and increased electricity demand [7][8]. - Outlook: Continued decline in coal prices is expected to lead to excess profits for thermal power companies, with coal prices dropping significantly from 855 RMB/ton in 2024 to 721 RMB/ton in Q1 2025 [12][15]. Hydropower - Performance: In 2024, companies such as Shaoneng Co. and Guizhou Power reported profit increases of 128.83% and 86.26%, respectively, due to improved water inflow [24][26]. - Outlook: The potential for further profit improvement exists if water inflow during the flood season exceeds expectations [35]. Nuclear Power - Performance: In 2024, China Nuclear Power reported a revenue increase of 3.09% but a profit decline of 17.38% due to rising tax expenses [40]. - Outlook: The long-term growth potential remains strong with new nuclear units expected to come online, enhancing future profitability [41]. Green Energy - Performance: Offshore wind companies like Fujian Haifeng showed impressive growth, with some companies reporting a 43% increase in Q1 2025 [4][24]. - Outlook: The report suggests focusing on policy catalysts for offshore wind and the potential restructuring of traditional green energy companies due to market pressures [4][24].