Investment Rating - The report maintains an investment rating of "Outperform the Market - A" for the environmental and public utility sector [5]. Core Insights - The global sustainable aviation fuel (SAF) market is projected to experience rapid growth due to regulatory requirements and voluntary commitments from airlines, with demand expected to reach 15.5 million tons by 2030 and 196 million tons by 2050 [20][30]. - The supply side is anticipated to face a significant shortfall of approximately 26 million tons by 2035, primarily due to limitations in feedstock availability for the dominant HEFA technology [34][37]. - China is actively promoting SAF through various policies and pilot applications, with expectations for domestic SAF production capacity to reach 2.5 million tons per year by the end of 2025 [39][45]. Summary by Sections 1. Weekly Topic: Embracing the Global Biojet Fuel Blue Ocean Market - The International Civil Aviation Organization (ICAO) and the International Air Transport Association (IATA) aim for net-zero emissions by 2050, with SAF being a crucial component for carbon reduction in aviation [20]. - Global SAF demand is projected to grow significantly, with 133 out of 193 ICAO member countries submitting action plans related to SAF [22]. - The report highlights specific regulatory requirements for SAF blending in various countries, including the EU's ReFuelEU Aviation Regulation, which mandates a minimum SAF content of 2% by 2025 [25][26]. 2. Market Review - The Shanghai Composite Index rose by 3.35% from June 23 to July 4, while the environmental index increased by 4.79%, outperforming the composite index [2][50]. 3. Industry Dynamics - National electricity load reached a historical high of 1.465 billion kilowatts on July 4, 2025, indicating robust demand in the energy sector [11]. - The report discusses various policies aimed at promoting renewable energy and SAF, including the "14th Five-Year Plan" for green development in civil aviation [42]. 4. Investment Portfolio and Recommendations - The report suggests focusing on companies with established SAF production capabilities, such as Jiaao Environmental, Pengyao Environmental, and Haixin Energy Technology, due to their potential in the growing SAF market [49]. - In the public utility sector, it recommends investing in coal-fired power companies like Sheneng Co. and Zhejiang Energy, as well as renewable energy firms involved in integrated power solutions [12]. 5. Environmental Sector Insights - The report emphasizes the potential for growth in the waste incineration sector, with companies like Weiming Environmental and Junxin Co. expected to benefit from improved cash flow and new revenue streams [13]. - Water service companies are also highlighted for their potential profitability as residential water prices gradually adjust [13].

Group 1: Core Insights - The current electricity industry is at a new starting point, with a focus on the ongoing deepening of electricity reform, which may catalyze a shift in the valuation anchor for the thermal power sector, particularly in Guangdong, where stock prices may present a good opportunity for investment [3][6][9] - The green electricity sector is entering a new demand-driven cycle following the issuance of Document 136, with wind power prices in certain provinces rebounding from historical lows, indicating a potential recovery in green electricity values [3][7][9] - Water and nuclear power assets are increasingly recognized for their long-term stable returns, especially in the current low-interest-rate environment, making them attractive investment opportunities [3][8][9] Group 2: Thermal Power Analysis - Since 2014, the thermal power sector has not demonstrated a systematic upward shift in valuation, with market consensus on profitability stability lacking, leading to a "Schrodinger state" for thermal power stocks as the market anticipates price negotiations in the second half of 2025 [6][17][18] - The market has historically experienced cycles of valuation driven by various factors, including coal price fluctuations and regulatory changes, with the current environment suggesting limited downside for electricity prices in Guangdong despite anticipated adjustments [6][22][24] Group 3: Green Power Development - The introduction of Document 136 has revolutionized the pricing mechanism for green electricity, allowing for better reflection of supply and demand dynamics, which is expected to alleviate previous pressures on green certificates and enhance their value [7][9][15] - The market has priced in pessimistic expectations for green electricity, but with wind resources expected to recover significantly, companies with high wind power ratios are positioned favorably for investment [7][9][15] Group 4: Water and Nuclear Power Insights - Water and nuclear power assets are viewed as the most underweighted in the public utility sector, with their scarcity in stable long-term returns becoming increasingly apparent in the current investment landscape [8][9][29] - The performance of major nuclear power companies is expected to improve significantly as capacity increases during the 14th Five-Year Plan, enhancing their free cash flow and capital expenditure capabilities [8][9][29]

Summary of Key Points from Conference Call Records Industry Overview - The real estate industry is experiencing a stabilization phase driven by government policies, with light asset sectors showing signs of recovery while heavy asset development is undergoing a cleansing process. Some risky enterprises are stabilizing due to government support [1][3] - New consumption has become a key driver of economic growth in China, contributing over 50% to GDP growth, although consumer spending as a percentage of GDP remains lower than in developed countries [1][4] - The real estate market is shifting towards a stock market model, with technology enhancing operational efficiency in light asset management, such as robots reducing costs by 20%-30% in property management [1][6] Market Dynamics - The real estate market is increasingly concentrated in core cities, with the top six cities accounting for 24.2% of national new home sales. Investment is also focused on first- and second-tier cities, a trend expected to continue [1][7] - Brand-name real estate companies are seeing improved profit margins in land acquisition in first- and second-tier cities, indicating a competitive advantage and potential for growth [1][9] - Since the policy implementation on September 26, 2023, the decline in new home sales has narrowed, but market activity is expected to decrease starting April 2024 [1][10] Investment Opportunities - There is a positive outlook for commercial, intermediary, and property management sectors, particularly for brand developers positioned in core cities. High dividend stocks in heavy asset commercial and light asset management are favored [2][15] - The real estate market is witnessing a divergence, with core cities performing significantly better than others, particularly in sales growth [1][11] Company Insights - China Resources Vientiane Life, a leading commercial management company, is expected to achieve sustained growth of 15%-20%, driven by its strong management capabilities and diverse product lines [16] - New City Holdings is a leader in shopping centers in third- and fourth-tier cities, showing good debt management despite market concerns [16] - Other notable companies include China Resources Land, which is transitioning towards asset management, and Green City Services, which is focusing on brand management and has shown resilience in profit growth [16][18] Future Trends - The real estate industry is moving towards a phase of "survival" to "thriving," with leading companies expected to benefit from improved land acquisition returns and liquidity [14] - The 2024 land market is expected to concentrate further in core cities, with developers showing strong replenishment intentions due to improved sales figures [12] - The overall adjustment process in the real estate sector is progressing positively, with significant reductions in bad debts and inventory impairments expected to conclude soon [14] Conclusion - The real estate sector is undergoing significant changes, with a focus on quality and efficiency driven by technology and government policies. Investment opportunities are emerging in commercial and property management sectors, particularly in core urban areas, while brand developers are positioned for growth amidst market consolidation [1][15]

Investment Rating - The industry investment rating is maintained as "Increase" [4][3] Core Views - The "136 Document" catalyzes rapid growth in new energy this year, with accelerated electricity market reforms and the southern regional market starting continuous settlement, leading to more flexible electricity pricing reflecting supply and demand changes [3][10] - The cumulative installed capacity of solar power reached 1.08 billion kilowatts by the end of May, with a year-on-year increase of 56.9%, while the share of thermal power generation capacity decreased to approximately 40% [15][67] - The southern regional electricity market officially transitioned to continuous settlement, allowing for daily trading and better reflection of supply-demand dynamics [15][10] Summary by Sections Industry Overview - As of the end of May, the total installed power generation capacity in China reached 3.61 billion kilowatts, a year-on-year increase of 18.8% [15][67] - In the first five months of the year, solar power added 197.85 GW of new capacity, a year-on-year increase of 149.97%, while wind power added 46.28 GW, a year-on-year increase of 134.21% [15][67] Market Dynamics - The average daily trading volume in the southern regional electricity market is expected to reach 3.8 billion kilowatt-hours after the transition to continuous settlement [15][10] - The coal price rebounded to 620 yuan per ton, impacting the thermal power sector [11][3] Key Stocks - Recommended stocks include Huaneng International, Jingtou Energy, Huadian International, Sheneng Co., and Baoneng New Energy, focusing on those with flexible quarterly performance [3][7] - Emphasis on undervalued green electricity operators, particularly in Hong Kong stocks and wind power operators, such as Xintian Green Energy and Zhongmin Energy [3][7] Carbon Market - The national carbon market trading price increased by 4.83% this week, with a total trading volume of 6.68 billion tons and a cumulative trading amount of 458.99 billion yuan [52][69]

Group 1: Fixed Income and Economic Outlook - The Federal Open Market Committee (FOMC) maintained the federal funds rate target range at 4.25% to 4.5%, marking the fourth consecutive meeting without a rate change, aligning with market expectations [2] - The statement indicated a slight reduction in uncertainty regarding the economic outlook, although it remains at a high level [2] Group 2: Energy Transition and High-Temperature Superconductors - Shanghai Superconductor, a leading company in high-temperature superconducting materials, reported projected revenues of CNY 0.83 billion and CNY 2.40 billion for 2023 and 2024, respectively, reflecting year-on-year growth of 133% and 187% [2] - The company's gross profit margins are expected to improve to 55.77% and 60.52% in 2023 and 2024, respectively, with a significant increase in net profit to CNY 0.73 billion in 2024, indicating a turnaround [2] - The report anticipates that the demand for controllable nuclear fusion will drive down costs and expand application scenarios for high-temperature superconductors [2] Group 3: E-commerce and Retail Growth - The 2025 "618" e-commerce promotion is expected to see stable double-digit growth, driven by a slightly extended activity cycle, government subsidies, and increased user engagement through instant retail scenarios [4] - Major e-commerce platforms are expected to continue competing on improving merchant operations and enhancing user stickiness through multi-channel marketing [4] - Recommended stocks include Alibaba (BABA US/9988 HK) and JD.com (JD US/9618 HK) due to their strong brand support and potential for cross-selling in instant retail [4] Group 4: Utilities and Environmental Sector Performance - The report anticipates a mixed performance among major thermal power companies in Q2 2025, with coal prices expected to decline month-on-month [5] - Hydropower generation is projected to decline year-on-year, while nuclear power operations remain stable [5] - Key focus areas for green power operators include electricity pricing mechanisms and cash flow management for environmental companies [5] Group 5: New Energy and Technology Trends - The report highlights optimism in the profitability of battery and structural components in the electric vehicle sector, alongside advancements in solid-state battery technology [8] - Wind power demand is expected to remain robust, with profitability recovery driven by offshore wind projects [8] - Recommended stocks include CATL, EVE Energy, and others involved in emerging technology sectors such as humanoid robots and AIDC [8] Group 6: U.S. Treasury Market Demand - The report analyzes the structural characteristics of U.S. Treasury investors, noting that international investors, broad-based mutual funds, and the Federal Reserve account for over 60% of the market [7] - Different investor types exhibit distinct motivations for purchasing Treasuries, with expectations for continued demand from commercial banks and pension funds in the second half of 2025 [7]

证券研究报告 | 行业周报 gszqdatemark 2025 06 08 年 月 日 在新一代煤电方面，提出对照《新一代煤电升级专项行动实施方案 （2025—2027 年）》要求，推动具备条件的现役机组和新建机组针对清 洁降碳、高效调节两类指标分别开展试点，通过采用零碳低碳燃料掺烧、 CCUS（（碳集、、利用与存））等降碳施施，著降降低煤电碳放；；开展 主辅机装备技术创新应用和系统、成优化，提高煤电机组快速变负荷、 深度调峰和宽负荷高效调节能力，同时需具备安全可靠启停调峰能力。 ➢ 多地发布高温预警，迎峰度夏开启有望提振用电需求，煤价跌至 618 元 /吨。4 月，国家能源局曾预计今年度夏期间，全国用电负荷将快速增长， 最高负荷同比增长约 1 亿千瓦，电力保供面临着一定压力。综合研判， 迎峰度夏期间，全国电力供应总体有保障，局部地区高峰时段可能）在 电力供应紧张的情况。本周，多地地表温度超过 60℃，高温范围持续扩 大。今年 1-4 月全社会用电量 31566 亿千瓦时，同比增长 3.1%，整体 用电需求偏弱。进入迎峰度夏，高温天气或催化用电需求提升。成本端 煤价持续下跌，本周北港动煤 5500K 跌至 6 ...

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the **electric power industry** and its transition towards **high-quality development** influenced by policy document **No. 136** [1][2] - The role of **thermal power** is shifting from being the main power source to a **backup and peak regulation** role, with coal prices significantly impacting profitability [1][2] Core Insights and Arguments - **Coal Price Impact**: The price of coal has dropped significantly, with the northern port 5,500 kcal thermal coal index reaching a low of **620 RMB/ton**. This decline has positively affected the profitability of thermal power plants [1][6] - **Performance of Power Companies**: Major thermal power companies like **Jingneng** and **Huadian** reported strong performance in Q1, with continued growth expected in Q2 despite a slight decrease in thermal power generation [1][4] - **Hydropower Performance**: Hydropower companies have also performed well due to favorable water conditions and stable electricity prices, with notable performance from the **Yalong River** in Q2 [1][4] - **Green Power Transition**: The green power sector is moving towards quality over quantity, with expectations for new installations to slow down. The focus is on improving yield rates and addressing subsidy and pricing pressures [3][5][12][13] Additional Important Content - **Capacity Pricing Mechanism**: The capacity pricing mechanism is expected to enhance revenue stability for thermal power companies, with projections indicating that the recovery of fixed costs will increase from **30%-50%** in 2024-2025 to **50%-70%** by 2026 [9][10] - **Investment Recommendations**: The call suggests focusing on large thermal power companies with high market procurement ratios and strong resilience, such as **Jingneng** and **Huadian**. Additionally, smaller projects with stable returns, like waste-to-energy projects, are also recommended [8][24][26] - **Long-term Outlook**: The long-term outlook for the thermal power sector is positive due to the multi-revenue system that enhances stability and reduces dependence on coal prices. Companies are expected to increase dividend rates as profitability stabilizes [11][24] Regional Contractual Insights - The signing of long-term contracts varies by region, influenced by supply-demand dynamics and coal price levels. For instance, Shanghai has a tight supply situation, while Jiangsu has seen an increase in new energy installations [7] Renewable Energy Challenges - The renewable energy sector faces challenges such as subsidy issues and consumption pressure, particularly in western regions where wind and solar energy utilization rates are low. The government is implementing measures to improve consumption scenarios [15][14] Conclusion - The electric power industry is undergoing significant changes driven by policy shifts and market dynamics. The focus on quality development, coupled with favorable coal prices, presents both opportunities and challenges for investors in the sector.

Investment Rating - The industry investment rating is "Overweight" [1] Core Insights - The report indicates that spot electricity prices may have bottomed out, leading to improvements in both valuation and performance [1] - The report highlights the increasing scarcity of large hydropower assets as the development of hydropower in China has largely been completed, except for the Tibet region [41][46] - The report anticipates that the approval of nuclear power projects will continue, with an expected national installed capacity of 110 million kilowatts by 2030, reflecting a CAGR of +11% from 2024 [3] - The report notes that the share of renewable energy in installed capacity has exceeded 40%, with significant growth expected in wind and solar power by 2030 [60][63] Summary by Sections Thermal Power - In northern regions, the higher proportion of renewable energy leads to better scarcity of thermal power, making prices easier to rise than to fall [3] - Recent increases in spot electricity prices in southern regions are attributed to previously low thermal power prices, which have severely impacted power plant profitability [3] Hydropower - The report states that the hydropower market in China has a relatively low electricity market share, with stable prices during the 13th Five-Year Plan and a slight increase expected during the 14th Five-Year Plan [46] - The scarcity of large hydropower assets is expected to become more pronounced as development enters its later stages [41] Renewable Energy - The report suggests that new policies for renewable energy will focus more on stabilizing electricity prices and controlling installed capacity growth, potentially leading to a slowdown in installation rates [3] - The report highlights that the marketization of renewable energy is progressing, but electricity prices are under pressure [64] Nuclear Power - Since 2019, the approval of nuclear power projects has become normalized, with over 10 units approved annually for four consecutive years [3] - The report projects that by 2030, the national installed capacity of nuclear power will reach 110 million kilowatts, indicating a robust growth trajectory [3] Financial Performance of Major Hydropower Companies - The report provides detailed financial metrics for major hydropower companies, indicating stable revenue and profit margins, with a focus on improving debt structures and reducing financing costs [54][55] - The dividend payouts of major hydropower companies have been steadily increasing, reflecting a commitment to returning value to shareholders [59]

Group 1: Pet Economy - The pet economy in China has been growing steadily, with the market size for urban pet consumption increasing from 170.8 billion RMB in 2018 to 300.2 billion RMB in 2024, reflecting a compound annual growth rate (CAGR) of 9.86% [2][6] - The pet food sector remains the primary market, with online market concentration (CR10) at only 33.7% in 2024, indicating a fragmented competitive landscape where domestic brands are gaining traction [2][6] - Companies like Lusi Co. and Haineng Technology are highlighted as key players in the pet industry chain, with Lusi focusing on meat snacks and expanding its overseas production capacity [2][6] Group 2: Autonomous Driving - The autonomous driving market in China is expected to reach nearly 450 billion RMB by 2025, with companies like Xiaoma Zhixing collaborating with public transport groups to commercialize self-driving technology [2][17] - The transition to L3+ level intelligent driving is underway, with significant investments in autonomous vehicle trials and applications across various sectors, including logistics and public transport [17][18] - The market for unmanned vehicles is expanding, with 11 companies identified in the North Exchange's autonomous vehicle industry chain, indicating a robust growth trajectory [17][19] Group 3: Media and Digital Assets - Hong Kong's introduction of the Stablecoin Bill is a significant step towards establishing itself as a digital finance hub, which may enhance the internationalization of the RMB and support offshore financial activities [10][11] - The upcoming summer film season is anticipated to boost box office performance, with several key films scheduled for release, highlighting the importance of quality content in driving industry growth [10][12] Group 4: Green Energy - The introduction of green electricity direct supply policies is expected to lower electricity costs for businesses and enhance carbon emission recognition, particularly benefiting export-oriented enterprises [23][24] - The policy allows for a more flexible supply model, which could accelerate the development of offshore wind energy projects in coastal regions [24][26] - Companies in the green energy sector, such as Shaoneng Co. and Yinxing Energy, are recommended for their potential to benefit from stable electricity demand through long-term contracts [27][28] Group 5: Pharmaceutical Industry - The Chinese innovative drug sector is experiencing significant growth, with a record high of 519 billion USD in license-out transactions in 2024, indicating increasing global recognition of domestic pharmaceutical companies [29][31] - The number of original research drugs entering clinical trials in China has surpassed that in the US, with 704 drugs reported in 2024, showcasing the country's growing capabilities in drug development [31][32] - Companies like Hengrui Medicine and Warner Pharmaceuticals are highlighted as key players in the innovative drug space, with strong potential for future growth [29][34] Group 6: Transportation and Logistics - The logistics industry is undergoing rapid transformation with the integration of artificial intelligence, as evidenced by the National Postal Administration's push for AI applications in postal services [36] - The introduction of new unmanned logistics vehicles, such as the E6 model by Jiushi Intelligent, is expected to lower operational costs and enhance delivery efficiency [36]

Power Generation Sector - The core viewpoint is that the northern thermal power sector shows resilience while hydropower maintains stable growth, leading to an "overweight" rating for the public utility sector [1] - In Q1 2025, the profitability of national thermal power companies continues to grow, with northern thermal power plants outperforming southern ones [1] - The median PE ratios for thermal power companies have decreased from 15.7 in Q1 2023 to 10.4 in Q1 2025, indicating a decline in market confidence regarding the sustainability of profit improvements [1][2] - Hydropower companies maintained a high growth rate in Q1 2025, with a median profit growth rate of 26%, driven by improved water storage and scheduling [2] - The median PE ratios for hydropower companies were 16.7, 18.8, and 18.1 for Q1 2023, Q1 2024, and Q1 2025 respectively, reflecting stable performance and improved valuations for leading companies [2] Green Energy Sector - Green energy companies are facing profit pressure due to declining electricity prices and unfavorable wind conditions, with median net profit growth rates of -12% in 2024 and -4% in Q1 2025 [3] - The overall industry is experiencing a situation of increasing revenue but not increasing profits, with expectations of recovery in 2025 as wind energy utilization hours improve [3] - Since 2022, the valuation of green energy companies has been continuously revised downwards, with a projected median net profit growth rate of around 12% for 2025 [3] Yiwu Trade Data - Yiwu's import and export total reached 231.31 billion yuan in the first four months of 2023, a year-on-year increase of 15.1%, with exports growing by 15.3% and imports by 13.5% [5] - The market procurement trade method accounted for 81.7% of Yiwu's total exports, indicating a strong contribution from this trade model [5][6] - Exports to major markets such as Latin America, the EU, and ASEAN showed strong growth, with increases of 18.3%, 15.5%, and 12.3% respectively [6] - The import structure is improving, with a significant increase in imports of mechanical and electrical products by 73.4% in the first four months [7]