Orient Securities·2026-03-15 07:11Investment Rating - The report maintains a "Positive" outlook on the utility sector, indicating it is a worthwhile asset for investment [6][3]. Core Insights - The "14th Five-Year Plan" emphasizes specific targets for the energy sector, including a 17% reduction in carbon emissions and a 25% share of non-fossil energy consumption by the end of the plan [6][3]. - The report highlights the ongoing reform of the electricity market, aiming for a unified national electricity market by 2030 and a market-based pricing mechanism for various energy sources [6][3]. - The utility sector has shown a recovery, with the Shenwan Utility Index rising by 3.1%, outperforming the CSI 300 Index by 2.9 percentage points [6][3]. Summary by Sections Investment Recommendations and Targets - The report suggests a positive outlook for the utility sector, driven by the restructuring of international order and the need for further market reforms to accommodate high proportions of renewable energy [6][3]. - Specific recommendations include: - Thermal Power: Expected improvement in dividend capacity and willingness, with suggested stocks including Jiantou Energy, Huadian International, Guodian Power, Huaneng International, and Waneng Power [6][3]. - Gas: Beneficiaries of high global gas prices include upstream gas assets, with related stocks being Shouhua Gas and Xintian Gas [6][3]. - Hydropower: Recommended to invest in quality hydropower assets, with stocks like Yangtze Power and Guotou Power [6][3]. - Nuclear Power: Strong long-term growth potential, with China General Nuclear Power as a related stock [6][3]. - Wind and Solar: Anticipated growth under carbon neutrality expectations, with a focus on leading companies in the sector [6][3]. Industry Dynamics - Electricity prices in Guangdong and Shanxi have seen significant year-on-year declines, with Guangdong's average price down by 13.8% and Shanxi's by 25.0% [9][10]. - Domestic coal prices have decreased, while port inventories have increased, indicating a shift in supply dynamics [13][22]. - International gas prices remain high, influenced by geopolitical tensions, with LNG prices in China rising significantly [25][27]. Market Performance - The utility sector has outperformed the broader market indices, with notable weekly gains across various sub-sectors, particularly wind and solar [38][40]. - Individual stock performances show significant increases for companies like Huadian Energy and Xiexin Energy, while some companies faced declines [44].