Market Performance - On November 3, the market rebounded with total trading volume at 2.11 trillion, a decrease of approximately 210.7 billion from the previous trading day[3] - The Shanghai Composite Index rose by 0.55%, the Shenzhen Component increased by 0.19%, and the ChiNext Index gained 0.29%[3] - On November 4, the market continued to rise with a trading volume of 2.13 trillion, down about 220 billion from the previous day[1] Sector Trends - Traditional sectors like steel and coal saw significant gains, while sectors such as non-ferrous metals, home appliances, and automobiles experienced slight declines[1] - Technology-related sectors, particularly media and computing, showed a notable increase in both volume and price, indicating strong market interest[1] Capital Flow - On November 3, net inflow in the Shanghai market was 10.83 billion, while the Shenzhen market saw a net outflow of 2.55 billion[4] - The top three sectors for capital inflow were power grid equipment, photovoltaic equipment, and IT services, while the top outflow sectors included batteries, industrial metals, and securities[4] Policy and Economic Developments - The People's Bank of China and the Bank of Korea renewed a bilateral currency swap agreement with a scale of 400 billion RMB/70 trillion KRW, effective for five years[5] - Zhengzhou aims to develop an influential seed industry by 2027, targeting a scale of 5.5 billion RMB in the industry chain[6] Industry Dynamics - The Southern Power Grid's market has achieved over 70% of its trading volume through market-based transactions, with green certificate trading accounting for 63% of the national total[10] - The ETF market has seen explosive growth, with an increase of over 2 trillion in scale within 10 months, reaching a total of 5.74 trillion RMB[15]

Group 1: New Energy Capacity and Generation - In the first half of 2025, the company added a net new installed capacity of 2,053 MW in renewable energy, with wind power at 987 MW and solar power at 1,096 MW [2] - As of June 30, 2025, the total installed capacity reached 43,196.7 MW, comprising 31,395.7 MW of wind power and 11,794.9 MW of solar power [2] - By August 2025, the company generated 5,273,319 MWh of electricity, a year-on-year increase of 32.97% after excluding coal power impacts, with wind power generation up by 22.38% and solar power by 74.41% [3] Group 2: Project Development and Resource Reserve - In the first half of 2025, the company secured new project development rights totaling 4,750 MW, including 2,980 MW for wind and 1,770 MW for solar [4] - The company is advancing major base projects, including the "Shagao Desert" renewable energy base, which has 2,000 MW of solar power operational and 1,000 MW of wind power under construction [5] - The Gansu Badan Jilin base is also progressing, with approvals received for the power source plan [6] Group 3: Dividend Policy and Shareholder Returns - The company maintains a stable dividend policy, with a payout ratio of 30% of net profit for 2024, translating to a dividend of RMB 0.2278 per share [6] - For 2025-2027, the company plans to keep cash dividends at no less than 30% of the annual net profit, with an interim dividend of RMB 0.1 per share, representing 24.77% of the first half's net profit [6] Group 4: Market Transactions and Pricing - In the first half of 2025, the average on-grid electricity price for wind power was RMB 0.422 per kWh, a decrease of RMB 0.016 per kWh compared to the previous year [7] - The average on-grid electricity price for solar power remained relatively stable at RMB 0.273 per kWh [7] - The company completed green electricity transactions of 4.14 billion kWh, a year-on-year increase of 41.67%, and traded 423.2 million green certificates, up by 81.46% [7]

Investment Rating - The investment rating for the company is "Buy" (maintained) [5] Core Views - The company's performance in the first half of 2025 met expectations, with a focus on operational turning points under comprehensive market entry [5] - The company reported a revenue of 15.657 billion RMB in the first half of 2025, a year-on-year decrease of 17.36%, and a net profit attributable to shareholders of 3.519 billion RMB, down 12.46% [7] - The company plans to distribute a mid-term cash dividend of 0.1 RMB per share, accounting for 24.77% of the net profit attributable to shareholders [7] - The decline in revenue is attributed to the divestment of thermal power, while the average on-grid electricity price for wind power decreased by 1.6 cents to 0.422 RMB/kWh [7] - The company has a significant focus on shareholder returns, committing to a cash dividend ratio of no less than 30% of the net profit attributable to shareholders for the years 2025-2027 [7] Financial Summary - The company’s projected revenue for 2025 is 32.408 billion RMB, with a year-on-year decrease of 12.6% [6] - The net profit attributable to shareholders is expected to be 5.982 billion RMB in 2025, with a projected P/E ratio of 8.8 [6] - The company’s total market capitalization is approximately 57.1 billion HKD, with a circulating market capitalization of about 22.7 billion HKD [3]

Core Viewpoint - The Chinese government is enhancing the "obtaining electricity" service level to create a modernized business environment for electricity use, aiming for lower costs, shorter processing times, and improved service quality [1][2][4]. Group 1: Reform Measures - The "zero investment" policy for low-voltage electricity connections will be expanded to include various private economic organizations, allowing individual businesses and farmers to enjoy free electricity connections [2]. - The processing time for low-voltage non-residential electricity applications will be significantly reduced from 15 working days to 5 working days for simpler projects [2][3]. - The government aims to establish a modernized electricity business environment by 2029, focusing on convenience, quality, green energy, inclusivity, and regulatory collaboration [2]. Group 2: Cost Reduction and Efficiency - The transition from "projects waiting for electricity" to "electricity waiting for projects" will help reduce electricity costs for enterprises, with a focus on efficient grid planning and construction [4]. - The State Grid Corporation is implementing measures to enhance electricity reliability and promote energy efficiency services for businesses, particularly in emerging industries [4][5]. - The introduction of AI technologies in electricity services aims to streamline the process of generating electricity supply plans, significantly reducing the time required for project applications [5]. Group 3: Rural Electrification and New Services - Significant investments have been made in rural electrification, with plans to further enhance infrastructure and service quality, aiming for a 40% reduction in average power outage time by 2024 [7]. - Innovative service models, such as "shared power sources" and "QR code electricity access," are being introduced to facilitate easier electricity access for rural users [8]. - The Southern Power Grid is focusing on integrating remote islands into the larger grid while ensuring reliable power supply through advanced technologies [8]. Group 4: Long-term Goals - The initiative to improve electricity service levels is a long-term and systematic task, with plans to develop cities and regions with strong international competitiveness in electricity business environments [9].

Core Viewpoint - The Southern Power Grid Company emphasizes the importance of stable electricity supply to support the growth of foreign trade, focusing on three main service areas: "quick electricity," "quality electricity," and "green electricity" [1][2]. Group 1: Quick Electricity Service - The company has introduced a "quick electricity" service model tailored to the fast-changing production needs of foreign trade enterprises, featuring dedicated high-end customer managers for personalized service [1]. - A specialized service team has been established to ensure that electricity is readily available to clients, minimizing wait times for electricity supply [1]. Group 2: Quality Electricity Service - The company has launched a "quality electricity" service mechanism to address the high-quality electricity demands of foreign trade enterprises, particularly in the high-end manufacturing sector [1]. - A team of "power quality customer engineers" has been formed to implement measures that ensure stable voltage and minimize production disruptions, supported by a published guideline on power quality services [1]. Group 3: Green Electricity Service - The company has established dedicated service centers in Guangzhou and Shenzhen to provide comprehensive "green electricity" services, covering the entire chain from generation to consumption [2]. - As of now, non-fossil energy installed capacity in the Southern Power Grid's operating area has reached 63%, with a generation share of 53%, ensuring sufficient green electricity supply for enterprises [2]. - In the first quarter of this year, over 10 million green certificates were traded in Shenzhen alone, highlighting the growing demand for green energy solutions [2].