KAIYUAN SECURITIES·2026-03-02 06:18Core Insights - The report maintains a positive investment rating for the power industry, highlighting the sustained high demand for power equipment due to ongoing reforms in the electricity sector [1][3] - The overall electricity demand in China is projected to grow steadily, with a total consumption of 10.37 trillion kWh in 2025, reflecting a year-on-year increase of 5.0% [4][24] - The report emphasizes the need for investment in modern infrastructure, with the State Grid announcing a planned investment of 4 trillion yuan during the 14th Five-Year Plan period [9][39] Industry Review - The dividend style in the A-share market performed poorly in 2025, with the public utility sector lagging behind the CSI 300 index [4][18] - The electricity supply-demand balance is expected to show a "wide electricity volume, tight electricity power" pattern during the 14th Five-Year Plan, with comprehensive electricity prices stabilizing [4][32] - The total electricity generation in 2025 is estimated at 8.06 trillion kWh, with coal, hydro, nuclear, wind, and solar power contributing 64.8%, 13.5%, 5.0%, 10.8%, and 5.9% respectively [29][32] Thermal Power - The report notes that thermal power prices are under pressure, with long-term contract prices in Guangdong, Jiangsu, and Zhejiang expected to decline significantly in 2026 [5][43] - The unit profitability of thermal power in northern China is improving, while coastal regions face profitability challenges [5][43] - The capacity price is expected to cover fixed costs for coal-fired power plants, enhancing their profitability [5][43] Hydropower - Hydropower companies are reported to be operating steadily, with dividend yields widening in a low-interest-rate environment, indicating long-term investment value [6][39] - The average net interest margin for hydropower has increased by 71 basis points compared to the previous year [6][39] Nuclear Power - The nuclear power price in Guangdong has stabilized, with the cancellation of the variable cost compensation mechanism mitigating the impact of market price declines [7][39] - The report anticipates a reduction in net profits for nuclear power companies due to falling electricity prices in Jiangsu [7][39] Green Power - The report highlights uncertainties in revenue policies for green power, with market reforms entering a critical phase [8][39] - Wind power prices are generally higher than solar power, although there are indications of a policy bottoming out for wind energy [8][39] Power Grid Equipment - The State Grid's investment plan of 4 trillion yuan is expected to sustain high demand for power grid equipment during the 14th Five-Year Plan [9][39] - The report notes a significant increase in the procurement of transmission and transformation equipment, with a year-on-year growth of 25.2% [9][39] Investment Recommendations - The report suggests focusing on investment opportunities in thermal power, wind power, domestic ultra-high voltage projects, and equipment exports [10][39] - Beneficiary companies include major players in thermal, hydropower, nuclear, green power, and power grid equipment sectors [10][39]