Report Summary 1. Investment Rating The report does not mention the industry investment rating. 2. Core View The continuous decline in the national carbon market price is due to the increase in actual circulating quotas, which has changed the trading mentality of both buyers and sellers. Whether the market can rebound in the fourth quarter depends on whether the net selling ratio of surplus enterprises' own allowances remains around 40% or significantly exceeds this level. After analyzing the operating conditions and carbon trading conditions of 31 listed companies in the A-share thermal power sector, the report moderately raises the expected selling ratio of surplus enterprises' own allowances. Although the procurement demand to be met by the voluntary selling of allowances by surplus enterprises decreases, there is still a possibility of a rebound in the fourth quarter [1][2]. 3. Summary by Section 3.1 Carbon Price Decline Caused by Increased Circulating Quotas According to the quota transfer rules, if all surplus enterprises implement the "maximum transfer" strategy, more than 200 million tons of mandatory circulating quotas will be added to the market from 2024 to 2025. The increase in actual circulating quotas has reversed the trading mentality of both buyers and sellers, leading to a continuous decline in carbon prices. As of September 18, 2025, the closing price of the national carbon market composite price was 60.33 yuan/ton, a year-on-year decrease of 34%, hitting a new low in nearly 26 months [4]. 3.2 Fourth - Quarter Market Trend Depends on Selling Ratio of Surplus Enterprises - **"Maximum Transfer" Scenario**: If all surplus enterprises implement the "maximum transfer" strategy, after subtracting mandatory circulating quotas, the procurement demand (including compliance settlement and basic transfer) to be met by the voluntary selling of allowances by surplus enterprises will be about 50 - 60 million tons in 2025. At this time, the exhaustion of mandatory circulating quotas may support a carbon price reversal, and the faster the release of mandatory circulating quotas, the earlier the market may rebound [5]. - **"Excessive Selling" Scenario**: Whether surplus enterprises adopt the "excessive selling" strategy is affected by two factors: the company's operating conditions and whether decision - makers tend to sell allowances to make up for operating losses, and decision - makers' expectations of the market price trend in 2026 and beyond [5]. 3.3 Indicator Selection for Assessing Enterprises' Quota - Selling Tendency - **Measuring Operating Conditions**: The report selects the "net profit margin attributable to the parent company after excluding non - recurring gains and losses" as the core indicator to measure the operating conditions of thermal power enterprises, with a statistical period from 2021 to 2025, calculated on a year - to - date (YTD) basis [7]. - **Observing Quota Selling**: The report sorts out the carbon emission trading income and expenditure of 31 companies based on their performance reports, with the same statistical period and calculation method [8]. - **Characterizing Compliance Pressure**: The report uses the "explicit carbon cost - to - income ratio" to characterize the company's compliance pressure [9]. - **Limitations of Indicator Design**: The "carbon emission trading" mentioned in the performance reports may involve multiple markets; most companies only disclose carbon emission trading information in semi - annual and annual reports; not all companies include carbon emission trading revenues and expenditures in non - recurring gains and losses, so data comparability is limited [10]. 3.4 Indicator Comparison Results - **Quantitative Analysis of the Impact of Carbon Market Compliance on Company Operations**: More than 90% of the sample enterprises had an explicit carbon cost - to - income ratio of less than 1% in 2024, and about 40% of the sample enterprises showed a trend of increasing compliance pressure year by year [10]. - **Operating Conditions of Power Enterprises and Timing of Selling Surplus Quotas**: It is expected that 24 sample companies had overall quota surpluses in the first two compliance cycles. Among them, the trends of the "net profit margin attributable to the parent company after excluding non - recurring gains and losses" and the "net carbon yield" (in reverse order) of 15 companies were basically synchronized, indicating that these enterprises may tend to "sell allowances to make up for operating losses". In the first half of 2025, 4 of these 15 companies had a positive balance of carbon emission rights, and some companies showed signs of weakening operations, with a high probability of adopting an "excessive selling" strategy. Some companies also showed a downward trend in their operating performance in the first half of 2025. Although they did not disclose carbon emission trading revenues and expenditures, they may have quota surpluses and tend to sell more than 40% of their surplus allowances in the second half of the year. Overall, the thermal power industry has had good operating conditions this year. Only a few enterprises are likely to "excessively sell" surplus allowances due to operating losses [2][15][17].

Core Insights - The national carbon market in China experienced a slight decline in price, with a closing price of 60.91 yuan per ton, down 0.83% from the previous day [1] Trading Volume and Revenue - The total trading volume for carbon emission allowances today was 1,505,975 tons, with a total transaction value of approximately 98.93 million yuan [1] - The agreement trading volume was 188,910 tons, generating a revenue of about 11.04 million yuan, while the bulk agreement trading volume was 1,317,065 tons, yielding approximately 87.88 million yuan [1] Cumulative Data - From January 1, 2025, to September 16, 2025, the total trading volume of carbon emission allowances reached 81,145,716 tons, with a total transaction value of approximately 5.80 billion yuan [1] - As of September 16, 2025, the cumulative trading volume of carbon emission allowances in the national market was 711,414,380 tons, with a cumulative transaction value of approximately 48.84 billion yuan [1]

Market Overview - The national carbon market opened at a price of 62.01 yuan per ton, with a highest price of 62.09 yuan per ton and a lowest price of 61.41 yuan per ton, closing at 61.42 yuan per ton, reflecting a decrease of 1.05% from the previous day [1][3]. Trading Volume and Revenue - The total trading volume for the day was 533,146 tons, with a total transaction value of 37,174,486.75 yuan [4]. - The挂牌协议交易 (listed agreement trading) had a transaction volume of 145,146 tons and a transaction value of 8,695,286.75 yuan, while the 大宗协议交易 (bulk agreement trading) had a transaction volume of 388,000 tons and a transaction value of 28,479,200.00 yuan [3]. Cumulative Data - From January 1 to September 15, 2025, the cumulative trading volume in the national carbon market reached 79,639,741 tons, with a cumulative transaction value of 5,705,395,462.15 yuan [5]. - As of September 15, 2025, the total cumulative trading volume in the national carbon market was 709,908,405 tons, with a cumulative transaction value of 48,738,122,565.66 yuan [6].

Market Overview - The national carbon market opened at a price of 63.55 yuan/ton, with a highest price of 64.10 yuan/ton and a lowest price of 63.20 yuan/ton, closing at 63.28 yuan/ton, reflecting a decrease of 0.42% from the previous day [1][4]. Trading Volume and Revenue - Today's trading volume for listed agreement transactions was 338,358 tons, with a transaction value of 20,398,348.79 yuan. The bulk agreement trading volume was 717,000 tons, with a transaction value of 45,082,800.00 yuan. There were no single-direction bids today [1]. - The total trading volume of carbon emission allowances for the day reached 1,055,358 tons, with a total transaction value of 65,481,148.79 yuan [1]. Cumulative Data - From January 1, 2025, to September 11, 2025, the total trading volume of carbon emission allowances was 77,964,715 tons, with a total transaction value of 5,598,499,292.97 yuan [1]. - As of September 11, 2025, the cumulative trading volume of carbon emission allowances in the national carbon market reached 708,233,379 tons, with a cumulative transaction value of 48,631,226,396.48 yuan [1].

Core Points - The national carbon market's comprehensive price on September 4 was 67.95 yuan/ton, reflecting a decrease of 1.18% from the previous day [1][5] - Total trading volume for carbon emission allowances today reached 2,727,076 tons, with a total transaction value of approximately 180.87 million yuan [1] - Since January 1, 2025, the cumulative trading volume of carbon emission allowances has reached 73,299,698 tons, with a total transaction value of approximately 5.30 billion yuan [1] Trading Data Summary - Opening price: 68.58 yuan/ton, highest price: 68.68 yuan/ton, lowest price: 67.45 yuan/ton, closing price: 67.95 yuan/ton [5] - Today's trading volume: 725,566 tons for listed agreement trading and 2,001,510 tons for bulk agreement trading [1] - Cumulative trading volume as of September 4, 2025: 703,568,362 tons, with a cumulative transaction value of approximately 48.34 billion yuan [1]

Group 1: Company Performance - China Hongqiao's strong performance is supported by rising product prices and sales volume, with a significant increase in revenue and net profit for the first half of 2025 [1] - The company reported a revenue of 81.04 billion yuan, a year-on-year increase of 10.1%, and a net profit of 12.36 billion yuan, a year-on-year increase of 35% [1] - The sales volume of aluminum alloy products reached approximately 2.906 million tons, up 2.4% year-on-year, while alumina sales volume was 6.368 million tons, up 15.6% year-on-year [1] Group 2: Market Outlook - The domestic electrolytic aluminum price has shown resilience, reaching 20,820 yuan per ton as of August 25, 2025, a 4.7% increase since the beginning of the year [2] - Domestic aluminum consumption is expected to total 54.3549 million tons in 2025, reflecting a year-on-year growth of 1.46%, with a projected growth rate of 3.06% when excluding export products [2] Group 3: Shareholder Returns - The company plans to repurchase shares worth no less than 3 billion Hong Kong dollars, demonstrating confidence in its future prospects [3] - A dividend of 1.02 Hong Kong cents per share was declared for June 13, 2025, with a total annual dividend of 1.61 Hong Kong cents per share for 2024, compared to 0.63 Hong Kong cents per share in 2023 [3] Group 4: Regulatory Environment - The electrolytic aluminum industry is moving closer to being included in the national carbon market, with guidelines for greenhouse gas emissions reporting and verification being publicly solicited [4] - The carbon emissions from producing electrolytic aluminum using thermal power are significantly higher than those using hydropower, which may lead to increased costs for thermal power aluminum and promote energy-saving measures [4]

Market Overview - The national carbon market opened at a price of 69.24 yuan/ton, with a closing price of 68.75 yuan/ton, reflecting a decrease of 0.95% from the previous day [1][2]. Trading Volume and Value - Today's trading volume for the listed agreement was 473,202 tons, with a transaction value of 32,420,095.71 yuan. The bulk agreement trading volume was 1,159,450 tons, with a transaction value of 65,588,200.00 yuan. There were no single-direction bids today [2]. Cumulative Trading Data - From January 1, 2025, to September 2, 2025, the total trading volume of carbon emission allowances in the national carbon market reached 67,500,147 tons, with a total transaction value of 4,924,501,110.19 yuan [4]. - As of September 2, 2025, the cumulative trading volume of carbon emission allowances in the national carbon market was 697,768,811 tons, with a cumulative transaction value of 47,957,228,213.70 yuan [5].

Core Points - The national carbon market in China reported a closing price of 69.41 yuan per ton on September 1, 2023, reflecting a 0.16% increase from the previous day [1][5] - The total trading volume for carbon emission allowances today was 469,600 tons, with a total transaction value of approximately 32.79 million yuan [1] - Since January 1, 2025, the cumulative trading volume of carbon emission allowances has reached 65,867,495 tons, with a total transaction value of approximately 4.83 billion yuan [1] - As of September 1, 2025, the cumulative trading volume of carbon emission allowances in the national market has reached 696,136,159 tons, with a total transaction value of approximately 47.86 billion yuan [1] Trading Data Summary - Today's opening price was 69.25 yuan per ton, with a highest price of 69.49 yuan and a lowest price of 69.25 yuan [5] - The trading volume for the挂牌协议交易 (listed agreement trading) was 152,600 tons, with a transaction value of approximately 10.57 million yuan, while the 大宗协议交易 (bulk agreement trading) had a volume of 317,000 tons and a value of approximately 22.22 million yuan [1] - The total transaction value for today's carbon emission allowances was approximately 32.79 million yuan [1][6]

Core Viewpoint - The article emphasizes the importance of building a more effective, dynamic, and internationally influential national carbon market in China as a key policy tool for addressing climate change and promoting green transformation in the economy and society [1]. Group 1: Current Status of National Carbon Market - China has established a national carbon emissions trading market and a voluntary greenhouse gas reduction trading market, which together form a comprehensive national carbon market system [2]. - As of July 2025, the cumulative trading volume of carbon emission allowances reached 681 million tons, with a transaction value of 46.784 billion yuan, indicating the gradual emergence of the price signal in the market [2]. - The number of key emission units included in the national carbon emissions trading market is 2,096, with a compliance rate of nearly 100% for allowance surrender [2]. Group 2: Development Goals and Roadmap - The document outlines a roadmap for the medium- and long-term development of the national carbon market, with specific targets set for 2027 and 2030 [4]. - It aims to enhance market functions, expand the coverage of industries and greenhouse gases, and establish a transparent carbon allowance management system [4]. - The transition from intensity control to total control of carbon emissions allowances is planned, along with a combination of free and paid allocation methods [4]. Group 3: Market Dynamics and Governance - The construction of the national carbon market is a complex system project that requires balancing market and government roles, long-term and short-term goals, and domestic and international relationships [6]. - The government is tasked with creating a regulatory framework and risk prevention system, while the market focuses on resource allocation efficiency [6]. - The article highlights the need for a balance between market vitality and regulatory oversight to ensure a healthy and orderly development of the carbon market [6]. Group 4: International Cooperation and Influence - The national carbon market is positioned as a mechanism for international cooperation in green and low-carbon development, adhering to international standards and enhancing global influence [7]. - The market is expected to serve as a bridge for promoting cross-border cooperation in green development and facilitating the international expansion of domestic green technologies and industries [7].

Group 1 - In August, the national carbon market price experienced a significant decline, closing at 69.3 yuan/ton on August 29, down 4.39% from the last trading day of the previous month [1] - The average daily closing price of carbon emission allowances (CEA) in August was 71.39 yuan/ton, a decrease of approximately 3% compared to July's average of 73.57 yuan/ton [1] - The average daily trading volume of CEA in August was 55.26 million tons, an increase of about 9% from July's 50.71 million tons, indicating a rise in market activity [1] Group 2 - The Central Committee of the Communist Party of China and the State Council issued an opinion on August 25 to accelerate the construction of a unified national carbon market, with plans to cover major industrial sectors by 2027 and establish a comprehensive trading market by 2030 [2] - The Ministry of Ecology and Environment announced plans to expand the coverage of the mandatory carbon market based on industry development, pollution reduction contributions, and data quality, transitioning from intensity control to total control [2] - The Ministry will also explore the development of green financial products related to carbon emissions and strengthen the management of carbon emission verification and reporting [3]