Investment Rating - Investment rating: Positive (maintained) [4] Core Viewpoints - The approval of coal power and pumped storage remains at a high level, indicating a sustained demand for traditional power generation equipment [5][7] - In July 2025, China approved 5.3GW of new coal power installations, lower than the 12.7GW in 2023 and 6.7GW in 2024 for the same period. The cumulative approved capacity from January to July reached 35.9GW, which is lower than 53GW in 2023 but roughly equal to 36GW in 2024 [11][15] - The peak load issue in China is becoming more pronounced due to the faster growth of electricity consumption in the tertiary sector and among urban and rural residents compared to the secondary sector. As of July 16, 2025, the highest electricity load in China exceeded 1.5 billion kilowatts, an increase of 0.55 million kilowatts compared to 2024, with further increases likely [15][17] Summary by Sections Section 1: Coal Power and Pumped Storage - The approval intensity for coal power remains unexpectedly high, with a total of 90.5GW, 83GW, and 78GW approved from 2022 to 2024, respectively. The current approval strength in 2025 has not declined, supporting previous assessments that the sustainability of high-intensity coal power approvals may exceed market expectations [15][21] - The effective capacity of coal power units is determined by the nameplate capacity minus auxiliary power consumption, while the effective capacity of wind and solar power is significantly lower, at 7% and 1% of their installed capacity, respectively [18][19] - For 2030, it is estimated that a net increase of 340GW of coal power will be needed to ensure system reserve rates do not decline, given the expected peak load increase to 1.94 billion kilowatts [18][19] Section 2: Pumped Storage - From January to July 2025, China approved 18.9GW of pumped storage, lower than 26.6GW in 2023 but higher than 14.3GW in 2022 and 16GW in 2024, indicating a sustained high approval intensity [6][19] - The cumulative approved capacity for pumped storage from 2022 to the first half of 2025 reached 189GW, with an estimated total order value of approximately 150 billion yuan based on a value of 800 million yuan per GW for hydraulic turbines [19][21] - Key companies in the pumped storage sector include Harbin Electric and Dongfang Electric, with Harbin Electric's new water power orders in 2024 reaching 9.65 billion yuan, a year-on-year increase of 64% [19][21]