CMS·2025-12-16 05:34Core Insights - The report emphasizes the stability of electricity prices in 2026, with a controlled decline expected due to the recovery of coal prices and the increase in capacity electricity prices [1] - The report highlights the need to focus on the growth of hydropower installations in the short term, given the regional water supply differentiation [1] - The report indicates that the gas sector is expected to see a loosening of global LNG supply, which will likely lower price levels and stimulate demand [1] Industry Overview - The public utility sector has seen an overall increase in 2025, with the public utility sector rising by 3.61% and the environmental sector by 16.05% as of December 13, 2025 [6][12] - The electricity sector has experienced a cumulative increase of 2.73%, while the gas sector has risen by 13.30%, indicating a mixed performance across sub-sectors [12] Electricity Sector Analysis - Thermal Power: The report notes that coal prices have stabilized and are expected to lead to a controllable decline in electricity prices in 2026. The average price of Qinhuangdao 5500 kcal thermal coal was 820 RMB/ton as of November 27, 2025, reflecting a month-on-month increase of 7% [6][81] - Hydropower: The report identifies a regional differentiation in water supply, with significant growth potential in hydropower installations in areas like the Jinsha and Dadu rivers, which are expected to contribute positively to performance [6][31] - Renewable Energy: The report highlights that the short-term electricity prices and consumption capacity for renewable energy are under pressure, with 29 provinces having implemented the 136 document, leading to increased competition and pricing challenges [6][44] - Nuclear Power: The report indicates that the marketization of nuclear power is increasing, with a stable growth outlook due to the commissioning of new units, despite some pressure from market price fluctuations [6][66] Gas Sector Analysis - The report discusses the global LNG supply, which is projected to increase significantly, with 239 million tons/year of LNG capacity under construction as of October 2025. This is expected to exert downward pressure on gas prices, thereby stimulating demand recovery [6][7] - The report emphasizes the importance of diversifying gas sources to ensure stable profitability for gas companies amid geopolitical risks and price fluctuations [6][7] Investment Recommendations - The report recommends investing in companies with strong growth potential in hydropower and stable profitability in thermal power, such as Guodian Power and Huaneng International, which offers a dividend yield exceeding 7% [7] - In the gas sector, it suggests focusing on companies that are actively developing coal-to-gas projects and those with significant commercial user bases, such as Jiufeng Energy and Kunlun Energy, which are expected to benefit from demand growth as gas prices decline [7]