Shenwan Hongyuan Securities·2025-10-14 08:43Investment Rating - The report rates the public utility industry as "Overweight" indicating an expectation for the industry to outperform the overall market [2][14]. Core Insights - The report highlights improvements in hydropower water inflow and continued cost reductions in thermal power generation, suggesting a positive outlook for the industry [5]. - It notes that the average utilization hours for thermal power equipment in China decreased by 144 hours year-on-year, but the profitability per kilowatt-hour is expected to maintain positive growth [5]. - The report anticipates a recovery in hydropower generation due to improved autumn rainfall, which is expected to enhance the financial performance of hydropower companies [5]. - Nuclear power generation is projected to grow steadily with new units coming online, contributing to overall electricity generation growth [5]. - The natural gas sector is seeing a gradual recovery in consumption, with expectations for continued cost reductions due to falling LNG prices and improved supply conditions [5]. Summary by Sections Thermal Power - In Q3 2025, the average spot price of 5500 kcal thermal coal was 672 RMB/ton, down 176 RMB/ton year-on-year but up 41 RMB/ton quarter-on-quarter [5]. - The report predicts that thermal power companies in northern China will continue to achieve above-average performance due to stable electricity prices [5]. Hydropower - The report indicates a 9.8% and 10.1% year-on-year decline in hydropower generation in July and August 2025, respectively, due to poor rainfall during the main flood season [5]. - However, significant improvements in autumn rainfall are expected to enhance hydropower generation capacity in Q4 2025 [5]. Nuclear Power - Nuclear power generation in China increased by 11.33% year-on-year in the first three quarters of 2025 [5]. - The report mentions that new nuclear units are expected to come online in Q4 2025, further boosting generation capacity [5]. Natural Gas - The apparent consumption of natural gas in China for January to August 2025 was 284.56 billion cubic meters, a slight decrease of 0.1% year-on-year [5]. - The report notes that natural gas prices are expected to decline further due to increased supply from major exporting regions [5]. Company Performance Forecast - The report provides performance forecasts for key companies in the public utility sector, indicating varying growth rates across different segments [6]. - For instance, Datang Power is expected to see a profit growth rate of 20%-50%, while companies like China Nuclear Power and China General Nuclear Power are projected to have negative growth [6]. Investment Recommendations - The report recommends several companies for investment based on their expected performance, including Guodian Power, Huaneng International, and China Nuclear Power, among others [5][7].