火电盈利提升，环保现金流延续改善

Investment Rating - The report maintains an "Overweight" rating for the public utility sector and the environmental sector [7]. Core Views - The thermal power sector is benefiting from declining coal prices, leading to improved profitability for most sample companies, with a year-on-year increase in net profit per kilowatt-hour [2][3]. - Hydropower performance is mixed due to varying water inflow, while green energy companies underperformed expectations primarily due to increased power restrictions and declining electricity prices [3][25]. - The nuclear power sector is expected to see profit growth from accelerated project approvals and new projects coming online [2]. - The natural gas supply-demand balance is relatively loose, with expectations for improved margins as residential pricing mechanisms are implemented [4]. - Environmental companies are experiencing improved cash flow, supported by government debt reduction policies [5]. Summary by Sections Thermal Power - In 1H25, the coal market was relatively loose, leading to a rapid decline in coal prices and a decrease in fuel costs for thermal power companies, resulting in a year-on-year increase in net profit per kilowatt-hour for most companies [3][15]. - The report highlights companies such as Huaneng International and Guodian Power as key players to watch due to their high dividend characteristics and expected recovery in Q3 generation capacity [3][19]. Hydropower - The hydropower sector showed a year-on-year net profit growth of 0% in 2Q25, aligning with expectations, but performance varied significantly among companies due to water inflow differences [28][29]. - Companies like Nanfang Energy benefited from unexpected hydropower generation, while others like Gui Guan Power faced challenges due to reduced water inflow [28]. Green Energy - The green energy sector's net profit growth was -30% in 2Q25, falling short of expectations, with most companies underperforming due to increased power restrictions and lower electricity prices [25][26]. - The report anticipates that the recovery in net profit for green energy companies in the second half of 2025 will be driven by improved subsidy payments and resource conditions [25][26]. Natural Gas - The natural gas sector's net profit growth in 1H25 was below expectations due to lower gas sales and pressure on value-added services [4]. - The report forecasts a stable growth in natural gas demand in 2H25, with key companies like Kunlun Energy and Jiufeng Energy highlighted for potential performance improvements [4]. Environmental Sector - The environmental sector's operating cash flow showed a median year-on-year growth of 3% in 1H25, with several companies like Weiming Environmental and Chengfa Environment turning free cash flow positive [5][27]. - The report emphasizes the importance of government policies in supporting cash flow improvements and highlights companies like China Everbright Environment as key players to watch [5].