Core Viewpoint - The LNG market is experiencing an unusual price increase during the traditionally low consumption season, with prices reaching historical highs since 2015, driven by supply constraints and rising costs [1][2][4]. Price Trends - As of mid-July, LNG prices rose to 4321.7 yuan/ton, an 11.1% increase from early July [1]. - The national LNG ex-factory price index surged from 3840 yuan/ton on July 5 to 4556 yuan/ton by July 20, with peak prices reaching 5200 yuan/ton in July, compared to 2700-3500 yuan/ton in the same month last year [2][4]. - By July 23, LNG prices began to decline, dropping to 4434 yuan/ton, with further reductions observed at specific receiving stations [5]. Supply Constraints - PetroChina's gas supply restrictions, initially set at 30% and later increased to 50% for certain factories, have significantly impacted LNG prices [2][4]. - The rise in raw gas prices from 1.68 yuan/cubic meter to 1.88 yuan/cubic meter has added nearly 300 yuan/ton to LNG production costs [4]. Market Dynamics - Analysts suggest that the current price increase may not be sustainable due to limited downstream demand and increasing pressure on traders to sell [5][6]. - The international LNG spot prices have also risen, with an average of 9.96 USD/million BTU in July, marking an 80% increase from the previous year [4]. Future Outlook - Short-term forecasts indicate a potential decline in LNG prices as supply conditions improve and demand remains weak [5][6]. - Long-term projections suggest that winter prices could rise significantly, potentially reaching 6000-7000 yuan/ton, depending on the stability of supply from Central Asia [7].

Investment Rating - The report provides a "Buy" rating for several companies in the power and gas sectors, indicating a positive outlook for their performance [41]. Core Insights - The report highlights the recent adjustments in the value-added tax (VAT) policies for wind and nuclear power, which may impact profitability for operators in these sectors [9][10]. - It notes the competitive pricing results for electricity in Xinjiang and Gansu, with Xinjiang's prices nearing the upper limit of the bidding range, suggesting a favorable environment for renewable energy operators [8]. - The report discusses the decline in global LNG prices, with China's comprehensive LNG import price reaching a four-year low, which could benefit domestic gas companies [12][27]. Summary by Sections 1. Power Sector - Xinjiang's mechanism electricity bidding results show a scale of 36 billion kWh for solar and 185 billion kWh for wind, with prices at 0.235 CNY/kWh and 0.252 CNY/kWh respectively, indicating a competitive market [5][8]. - The VAT policy changes will eliminate the 50% VAT refund for onshore wind from November 1, 2025, while maintaining it for offshore wind until the end of 2027 [9][10]. - Recommendations include focusing on companies like Guodian Power, China Nuclear Power, and Longyuan Power due to their stable growth prospects [11]. 2. Gas Sector - Global gas prices have shown slight declines, with the US Henry Hub price at $2.82/mmBtu, reflecting a 2.90% weekly drop [12][15]. - China's LNG import price has dropped to 2852 CNY/ton, the lowest since mid-2021, driven by lower oil prices affecting long-term contracts [27][29]. - The report suggests a positive outlook for gas companies like Kunlun Energy and New Hope Energy, as cost reductions and economic recovery may enhance profitability [29]. 3. Environmental Sector - The report emphasizes the benefits of debt-for-equity swaps and the increasing stability of returns for green energy operators, recommending companies like China Everbright Environment and Hongcheng Environment [11]. - It highlights the ongoing rise in SAF (Sustainable Aviation Fuel) prices, suggesting investment opportunities in related companies [11]. 4. Key Company Valuations - The report includes a valuation table for key companies, with several rated as "Buy," indicating strong expected performance in the coming years [41].