Changjiang Securities·2025-09-02 08:43Investment Rating - The report maintains a "Positive" investment rating for the power industry [12]. Core Insights - Since 2025, electricity demand has slowed, with a year-on-year growth of 3.73% in total electricity consumption in the first half of the year. The revenue of the power sector decreased by 3.61% year-on-year due to adjustments in annual long-term contract prices in several provinces. However, benefiting from a significant drop in coal prices and stable growth in the high-margin hydropower sector, the net profit attributable to shareholders in the power sector increased by 1.49% year-on-year. In the second quarter, net profit decreased by 2.16% year-on-year, with performance continuing to diverge among sub-sectors [2][21][36]. Summary by Sections Overall Industry Performance - In the first half of 2025, the power sector achieved a revenue of 844.48 billion yuan, a decrease of 3.61% year-on-year, while net profit attributable to shareholders was 102.01 billion yuan, an increase of 1.49% year-on-year [21][25]. Thermal Power - In the first half of 2025, thermal power generation decreased by 2.40% year-on-year, and revenue fell by 5.81% year-on-year to 608.77 billion yuan. However, net profit increased by 3.92% year-on-year to 48.91 billion yuan due to significant cost reductions, with the average coal price dropping by 199.21 yuan per ton [6][27][52]. Hydropower - Despite a decrease in water inflow, major hydropower companies maintained stable growth, with revenue increasing by 4.16% year-on-year to 62.21 billion yuan and net profit rising by 10.05% year-on-year to 22.44 billion yuan in the first half of 2025 [7][27]. Renewable Energy - The renewable energy sector faced challenges due to weak wind and solar conditions, with revenue growth of only 2.18% year-on-year to 156.40 billion yuan. Net profit decreased by 7.24% year-on-year to 29.65 billion yuan, impacted by rising costs and market price pressures [8][27]. Grid Sector - The grid sector's performance was affected by reduced water inflow and weak electricity demand, resulting in a net profit of 0.998 billion yuan, a decrease of 7.25% year-on-year [9][27]. Investment Recommendations - The report expresses optimism about the transformation of quality thermal power and the investment value of clean energy. It recommends leading companies in thermal power such as Huaneng International, Huadian International, and Guodian Power, as well as hydropower companies like Yangtze Power and Huaneng Hydropower. For renewable energy, it suggests companies like China Nuclear Power and Funiu Co., Ltd. [10][40].