Hua Yuan Zheng Quan·2025-11-09 13:51Investment Rating - The industry investment rating is "Positive" (maintained) [3][67]. Core Viewpoints - The third quarter performance review of the power sector indicates that green energy and nuclear power continue to face pressure, while thermal power benefits from cost reduction and hydropower remains stable [3][4]. - The decline in profitability for renewable energy companies is primarily due to reduced utilization hours and falling electricity prices [4][10]. - The significant improvement in cash flow for green energy companies in Q3 is attributed to a substantial increase in subsidy repayments [4][21]. Summary by Sections Green Energy - In Q3 2025, except for Xintian Green Energy, Jinko Technology, and Yinxing Energy, the net profits of other companies decreased, with the profit increase for Xintian Green Energy and Jinko Technology mainly due to unexpected cost reductions and increased investment income [3][10]. - The decline in profitability for renewable energy companies is linked to poor wind resources and increased curtailment rates due to rapid installation of new energy capacity [4][12]. - The average utilization hours for wind power in China decreased by 93 hours year-on-year from January to September 2025 [12]. Thermal Power & Hydropower - Major thermal power operators saw significant profit increases in the first three quarters, benefiting from falling coal prices, with the average spot price of Qinhuangdao down by 191 yuan/ton [5][25]. - Despite revenue pressures from declining electricity prices, the net profits of thermal power operators increased significantly due to lower coal costs [5][25]. - Hydropower performance varied due to water flow conditions, with some large hydropower companies experiencing slight revenue declines [5][35]. Nuclear Power - Nuclear power companies experienced a decline in net profits in Q3 2025, with China Nuclear Power's profit drop being more pronounced due to the impact of the renewable energy sector [6][39]. - The decline in electricity prices is a common challenge for nuclear power companies, although China General Nuclear Power managed to reduce costs and increase other income [6][39]. - The recent changes in Guangdong's electricity pricing policy are expected to positively impact the profitability of nuclear power companies in the future [40][39]. Recommendations - Long-term focus on quality hydropower companies such as Yangtze Power, Guotou Power, and Chuan Investment Energy, as well as undervalued wind power companies like Longyuan Power and Datang Renewable [42]. - Short to medium-term attention on leading companies with strong cyclical resilience, such as China Resources Power and Longyuan Power [42]. - Regional targets include companies like Jiazhe New Energy and Qianyuan Power [42][43].