26长协电价或好于预期，电力可保持乐观

Investment Rating - The report assigns an "Overweight" rating for the utility sector, indicating a potential increase of over 15% relative to the CSI 300 index [1][10]. Core Insights - The report suggests that the long-term contract electricity prices for 2026 may be better than expected, with a projected nationwide decline in electricity prices of around 2 cents. If coal prices decrease compared to 2025, the profitability of power plants may remain stable or even improve, particularly for northern power plants [3][5]. - The report highlights that the performance of northern power plants is expected to be stronger, recommending a focus on these plants and undervalued national H-shares [3][5]. - The China Electricity Council forecasts that national electricity consumption will reach 10.37 trillion kWh in 2025, with a year-on-year growth of 5.0%, and an average annual growth of 6.6% during the 14th Five-Year Plan period [5]. - The report notes significant investments in ultra-high voltage projects, with a total fixed asset investment of 30.8 billion yuan in January 2026, representing a year-on-year increase of 35.1% [5]. - The report anticipates a recovery in the performance and valuation of hydropower and thermal power sectors, with companies like Qianyuan Power expected to see a net profit increase of 160-190% due to favorable water conditions [5]. Summary by Sections - Electricity Price Outlook: The report indicates that the long-term contract electricity prices for 2026 may not be overly pessimistic, with a potential nationwide price drop of about 2 cents. The profitability of power plants could remain stable or improve if coal prices decline [5]. - Regional Performance: Northern power plants are expected to perform better, and the report recommends focusing on these plants and undervalued national H-shares [3][5]. - Electricity Demand Forecast: The China Electricity Council predicts that national electricity consumption will reach 10.9-11 trillion kWh in 2026, with a year-on-year growth of 5%-6% [5]. - Investment in Infrastructure: Significant investments in ultra-high voltage projects are noted, with a total investment of 30.8 billion yuan in January 2026, marking a 35.1% increase year-on-year [5]. - Sector Performance Expectations: The report anticipates a positive outlook for hydropower and thermal power sectors, with notable profit increases expected for several companies due to favorable conditions [5].