EBSCN·2025-12-08 03:49Investment Rating - The report maintains a "Buy" rating for the public utility sector, indicating an expected investment return exceeding 15% over the next 6-12 months [5]. Core Insights - The report highlights a significant decline in thermal coal prices, with specific price drops noted for various coal types at different ports. For instance, the price of 5500 kcal thermal coal at Qinhuangdao port decreased by 24 CNY/ton this week [2][10]. - The report also discusses the ongoing electricity market reforms, particularly in Guangdong, where the 2026 annual trading process has commenced, involving various trading methods [3][4]. - The renewable energy sector is expected to see valuation recovery due to new policies promoting green electricity consumption and accelerated subsidy distribution [4]. Summary by Sections Market Overview - The SW public utility sector saw a slight increase of 0.12% this week, ranking 17th among 31 SW sectors. In comparison, the CSI 300 index rose by 1.28% [26]. - Notable stock performances included Min Dong Power (+16.86%) and Zhong Min Energy (+12.62%), while Shanghai Electric saw a decline of -13.53% [32]. Coal and Electricity Pricing - Thermal coal prices have rapidly decreased, with specific reductions of 24 CNY/ton at Qinhuangdao, 20 CNY/ton at Fangchenggang, and 10 CNY/ton at Guangzhou [2][11]. - Average settlement prices for electricity in Guangdong increased to 354.64 CNY/MWh, reflecting a rise from the previous week [11]. Key Events - The report notes the release of competitive bidding results for renewable energy projects under the "136" document, with significant volumes and pricing established for solar and wind energy [3][9]. - The Guangdong Electricity Trading Center has initiated the 2026 annual trading process, which will occur in phases from December 5 to December 22 [3][4]. Sector Outlook - The renewable energy sector is anticipated to benefit from policy changes aimed at enhancing green electricity consumption, suggesting a potential for valuation recovery [4]. - The report recommends focusing on national thermal power operators like Huaneng International and Guodian Power, which are expected to maintain stable earnings despite market uncertainties [4].