Core Viewpoint - The power sector is experiencing significant performance improvements due to increased electricity demand driven by high temperatures and a decline in coal prices, leading to better profitability for thermal power companies [1][4][9]. Group 1: Electricity Sector Performance - Several electricity stocks have shown remarkable gains, with Huayin Power rising over 80% and Xinhong Port increasing by approximately 48% from July 1 to July 15 [3]. - Huayin Power expects a net profit of 180 to 220 million yuan for the first half of the year, a year-on-year increase of 3600.70% to 4423.07%, attributed to increased power generation and reduced fuel costs [4]. - The electricity sector is benefiting from rising electricity demand due to summer heat and industrial production, alongside emerging demands from AI computing and electric vehicle charging [4][9]. Group 2: Coal Market Dynamics - The domestic coal supply may tighten due to "anti-involution" policies, while high temperatures continue to drive electricity demand, supporting a rebound in coal prices [2][11]. - The average price of thermal coal has dropped significantly, with a cumulative decline of 146 yuan per ton for thermal coal and 290 yuan per ton for coking coal since the beginning of the year [10]. - The coal sector's profitability has been under pressure, with profits down over 50% year-on-year from January to May, but recent developments suggest a potential turnaround [10][11]. Group 3: Future Outlook - The electricity sector's fundamentals appear positive, with a projected revenue increase for nuclear and hydropower sectors, and the electricity index showing a price-to-earnings ratio of 18.14, indicating room for valuation recovery [5]. - The firepower sector remains a key beneficiary of rising electricity demand, with stable supply compared to renewable sources [7]. - The "anti-involution" policy may lead to an orderly exit of excess coal production capacity, potentially stabilizing coal prices and supporting the profitability of thermal power companies [11][13].