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]

Core Viewpoint - The industries that will thrive in 2025 include energy, technology, internet, and cultural entertainment, each characterized by distinct features and development trends [3][4][5] Industry Characteristics - The energy industry encompasses electricity, oil, and natural gas, characterized by thermal, photovoltaic, and combustion properties, symbolizing brightness and vitality [4] - The technology sector includes artificial intelligence, the Internet of Things, and new energy, marked by innovation and transformation, symbolizing intelligence and progress [4] - The internet industry is defined by rapid information dissemination and wide coverage, symbolizing the flow and connection of information [4] - The cultural entertainment sector includes film production, game development, and the music industry, characterized by cultural and entertainment aspects, symbolizing the richness and diversity of spiritual life [4] Development Trends - The energy sector faces transformation pressures due to increasing global demand for clean energy, while new energy sources like solar and wind power will see growth opportunities [5] - Breakthroughs in technology fields such as artificial intelligence, IoT, and new energy will enhance social efficiency and create new development opportunities [5] - The internet industry will further promote efficient information transmission and application with the advancement of new communication technologies like 5G and 6G, leading to new business models and market opportunities [5] - The cultural entertainment industry will experience growth opportunities driven by rising living standards and increased demand for spiritual cultural life, particularly with advancements in virtual reality and augmented reality technologies [5]

Core Viewpoint - The article discusses the structural differentiation in the current stock market, highlighting the significant performance gap between A-shares and Hong Kong stocks, driven by foreign capital inflow, the weight advantage of technology stocks, and differing policy expectations [2][3]. A-share High Dividend Portfolio: Stable Foundation for Value Reassessment - Financial Performance and Dividend Capability: In a low-interest and volatile market, high-dividend companies are preferred for their stable cash flow and shareholder returns. The total dividend of central state-owned enterprises is expected to reach 1.17 trillion yuan in 2024, accounting for 50% of the total A-share dividends [4][5]. - Key Companies: China Shenhua is expected to have a dividend yield of over 5.9% in 2024, while Huaneng International plans a dividend payout ratio of at least 50% of distributable profits. Wuliangye and Muyuan Foods are also highlighted for their strong financial performance and dividend potential [4][5][6]. - Competitive Moat: The sustainability of the high-dividend portfolio relies on the companies' competitive advantages, including cost advantages in the energy sector and brand differentiation in consumer goods [6]. - Market Outlook: The core opportunities for the high-dividend portfolio in 2025 include the resonance of declining interest rates and stable growth policies, with specific catalysts in the energy and consumer sectors [7]. Hong Kong Growth Portfolio: Profit Elasticity and Industry Wave Resonance - Financial Performance and Growth Momentum: The Hong Kong portfolio focuses on internet, consumer, and innovative pharmaceutical sectors, benefiting from global liquidity easing and AI breakthroughs. Meituan's revenue is expected to reach 337.6 billion yuan in 2024, with a net profit increase of 158.4% [8][9]. - Competitive Moat: The growth portfolio's moat is derived from network effects, research and development accumulation, and global capabilities, with companies like Tencent and Meituan leveraging their ecosystems [10]. - Market Outlook: The core opportunities for the Hong Kong growth portfolio in 2025 are driven by global liquidity easing and clear industry policy catalysts, particularly in AI applications and innovative pharmaceuticals [11]. Comparison of Portfolios and Investor Preferences - Market Performance and Fund Flows: Investors are currently favoring the Hong Kong growth portfolio due to significant performance differences, with the Hang Seng Index rising 16.1% compared to the -2.41% decline of the CSI 300 [13][14]. - Investor Structure Preference: The high-dividend portfolio attracts conservative investors such as insurance funds, while the growth portfolio appeals to foreign capital and growth-oriented funds [15][16]. - Current Popularity Assessment: The Hong Kong growth portfolio is more favored due to its higher earnings growth rate and alignment with global technology trends, while the high-dividend portfolio remains attractive for risk-averse investors [16][17].

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]

5月8日晚8时许，北京航星园8号楼7层会议室内，时钟的指针悄然划过刻度。三十余双布满血丝的 眼睛紧盯着系统后台，屏幕的冷光映照着每一张疲惫而专注的面庞。当"运行成功"的绿色提示框跃然屏 上时，技术负责人杨硕布满键盘压痕的右手重重拍在桌面："火电人的首场大考，我们交卷了！"刹那 间，雷鸣般的掌声响彻整个会议室。 在场景开发规则创建过程中，高级产品经理高静毫不保留地传授经验，手把手指导新人。 键盘敲击声此起彼伏，应用研发专班的张迪手边的咖啡罐已堆成小山。他的指尖在机械键盘上飞 舞，手指因过度敲击微微颤抖，最后索性用空咖啡罐压住手腕保持稳定。这时，刚下高铁的专班成员马 国亮拖着行李箱直奔会议室，立即投入工作讨论，夜色在代码行间悄然流转。 这场与时间的赛跑中，一个个感人的故事正在上演。 数据工程师常笑瑀接到家人突发住院的消息，他攥着震动的手机冲进医院时，走廊挂钟的时针正指 向凌晨三点。他蜷缩在医院陪护椅上，膝盖上的笔记本电脑倔强地亮着——在心电监护仪的滴答声中， 一串串代码正艰难破茧。当家人把贴着"平安"字样的充电宝塞他手中时，这个北方小伙的喉结微微颤 动，屏幕上跳动的光标仿佛被赋予了温度，那是照亮千家万户智慧用电的 ...

中长期交易"压仓锁价"，筑牢收益底线。配售电公司根据市场供需形势、现货价格走势和机组检修方式，将各厂年度交易锁定80%基 本盘压仓；通过分析东西部区域价差规律，建议各厂优先与低价区域用户签约；与同行业建立良好合作关系，灵活置换冗余电量，提升 交易流动性，全力获取中长期保价收益。截至4月底，蒙西火电完成中长期交易电量82.43亿千瓦时，合约签约率完成109%，在五大发电 集团中控制最优；中长期交易均价完成343.37元/兆瓦时，在五大发电集团中位居次席，为集团公司锁定保底收入超过28亿元。 现货交易"分钟级狙击"，捕捉价格脉冲。配售电公司不断完善现货交易日调度工作机制，月内实施"政策研究响应-日调度-周跟踪-月 复盘"闭环管理，日内实施"晨间价格预判-日内大盘调仓-夜间复盘总结"工作流程，借助营销数字平台及辅助决策系统建立"数据雷达"， 整合全网海量信息，精准预判价格走势，动态测算合约签约比例，利用日内融合挂牌和置换交易窗口，灵活调整持仓掘金，严格遵循"日 保周、周保旬、旬保月"工作原则，精打细算提高机组盈利水平。4月份，蒙西火电现货市场电能均价、售电均价均在五大发电集团中排 名第一，创现货市场开启以来历史最高 ...

Group 1: Meituan (3690 HK) - The report maintains a "Buy" rating for Meituan, with a target price adjusted to HKD 165.00, indicating a potential upside of 27.5% from the closing price of HKD 129.40 [1] - In Q1 2025, Meituan's revenue grew by 18% year-on-year, with core business and new business revenues increasing by 18% and 19% respectively. The adjusted operating profit margin for the core business improved by 3.2 percentage points to 21% [1][2] - The report anticipates that increased competition in the food delivery sector may impact revenue and profit growth in Q2 2025, projecting a revenue growth of 4% for food delivery and 30% for flash purchase services [2] Group 2: Huya Group (YY US) - The report maintains a "Buy" rating for Huya Group, with a target price of USD 60.00, suggesting a potential upside of 29.9% from the closing price of USD 46.19 [3] - In Q1 2025, Huya's revenue was USD 490 million, a year-on-year decline of 12%. Live streaming revenue decreased by 20%, while non-live streaming revenue increased by 25%, raising its revenue share to 25% [3] - The report expects Huya's BIGO live streaming segment to stabilize and recover in Q2 2025, with advertising revenue anticipated to accelerate in growth [3] Group 3: China Power (2380 HK) - The report maintains a "Buy" rating for China Power, with an increased target price of HKD 3.77, reflecting an 18.2% potential upside from the closing price of HKD 3.19 [6] - For the first four months of 2025, China Power's total electricity generation increased slightly by 0.3% year-on-year, with wind and solar power generation rising by 32.1% and 13.6% respectively [6] - The report notes that the domestic coal prices have dropped over 7% since the end of March 2025, leading to an expected improvement in the fire power price differential for the first half of the year [6]

Core Viewpoint - The overall profitability of the A-share public utility industry is expected to continue improving in 2024 and Q1 2025, despite emerging supply growth impacts on electricity prices and utilization hours, leading to potential performance divergence among sectors [1] Group 1: Industry Overview - The A-share public utility industry is projected to see a slight revenue decline of 0.1% year-on-year in 2024, primarily due to falling market electricity prices driven by reduced fuel costs [1] - The industry’s net profit attributable to shareholders is expected to grow by 11.3% year-on-year, with ROE increasing by 0.4 percentage points to 8.6%, indicating a recovery to historical normal levels [1] - Capital expenditure in the industry is anticipated to rise by 20.8% year-on-year in 2024, supported by strong cash flow generation capabilities [1] Group 2: Sector Performance - **Thermal Power**: The domestic thermal coal price is expected to decrease by 11.4% year-on-year in 2024, improving profitability for thermal power companies. Despite supply shocks leading to lower market electricity prices in Q1 2025, further declines in fuel costs are projected to support profit growth [2] - **Hydropower**: The national hydropower utilization hours are expected to increase by over 200 hours year-on-year in 2024, resulting in a 17.4% profit growth. The continued improvement in water inflow is expected to provide a basis for further profit growth in 2025 [3] - **Nuclear Power**: New units like Fangchenggang Unit 4 are expected to drive a 2.9% increase in nuclear power generation in 2024. However, a one-time tax payment in Q4 2024 is projected to lead to a decline in net profit [4] - **Renewable Energy**: Investment in renewable energy is expected to grow by 12.5% year-on-year to 754.5 billion yuan in 2024, but challenges in resource adjustment and transmission capacity are anticipated to negatively impact profitability, with net profit expected to decline by 14.3% in 2024 [5] - **Gas**: The gas sector is expected to see steady demand growth and a decline in gas prices, leading to stable performance. However, individual company factors may cause slight overall profit declines [6]

Core Insights - The energy sector shows strong fundamentals, resilience, and potential for growth as indicated by the 2024 annual reports and Q1 2025 disclosures [1] Industry Overview - The overall revenue for the electricity sector in 2024 reached 1.8256 trillion yuan, with a net profit of 166.23 billion yuan, reflecting significant improvement in profitability [1] - The electricity index increased by 13.80% from the beginning of the year, with hydropower showing relatively strong performance compared to other sub-sectors [3] - The demand for electricity is expected to grow by approximately 6% in 2025, driven by factors such as AI computing power and electric vehicle adoption [9] Company Performance - Huaneng International topped the revenue rankings in the electricity sector with total revenue of 245.55 billion yuan, despite a slight decrease of 3.48% year-on-year [3][4] - Longjiang Electric, a leading hydropower company, reported a revenue of 84.49 billion yuan in 2024, up 8.12%, and a net profit of 32.50 billion yuan, up 19.28% [5] - China General Nuclear Power achieved total revenue of 86.80 billion yuan, a year-on-year increase of 5.16%, with net profit growth of 0.83% [6][7] Market Trends - The electricity sector is expected to maintain a steady growth trajectory, supported by ongoing energy structure transformation and market reforms [9][10] - The construction of a unified national electricity market is progressing, with a significant increase in market participants, enhancing resource allocation efficiency [9] - The fire power sector is anticipated to continue its strong recovery due to low coal prices, while hydropower may face challenges from reduced rainfall [10][11] Strategic Outlook - The ongoing market reforms and the push for carbon neutrality are expected to reshape the valuation of electricity operators, with potential for improved operating environments for thermal power [11] - Mergers and acquisitions within the electricity sector are anticipated to enhance the resilience and valuation of state-owned enterprises [11]

Macro Strategy - The central bank's balance sheet is expected to continue shrinking due to the recent reserve requirement ratio cut, which may lead to further "balance sheet reduction" [1][8] - The US-China trade negotiations have boosted market confidence, resulting in a significant rise in US Treasury yields and a drop in gold prices [1][10] - The April US CPI showed an unexpected decline, but concerns about tariff risks remain, leading to cautious inflation outlooks [1][10] Fixed Income - The report analyzes the common characteristics of city investment platforms eligible to issue technology innovation bonds, emphasizing the importance of external ratings and financial independence from local governments [2][12] - City investment platforms with high credit ratings and low dependence on local government support are more likely to successfully issue technology innovation bonds [2][13] Industry - The issuance of the "Ecological Environment Protection Supervision Work Regulations" aims to enhance environmental governance and support high-quality development [3][14] - The solid waste sector is expected to see improved cash flow and dividend payouts due to reduced capital expenditures and enhanced operational efficiency [3][15] - The public utility sector is witnessing regulatory changes in Guangdong, which may impact the pricing mechanisms for renewable energy projects [4][17] Company Recommendations - The report recommends focusing on investment opportunities in hydropower and thermal power as summer approaches, highlighting specific companies such as China Yangtze Power and Huadian International [4][17] - The growth potential of nuclear power is emphasized, with several new approvals expected to enhance profitability and dividends [4][17] - The report suggests that green energy companies may benefit from improved asset quality and government support for historical subsidy issues [4][17] Specific Company Insights - Ruoyu Chen is positioned as a leading digital brand management company, with significant growth expected in its health product segment and an upward revision of profit forecasts for 2025-2027 [5][6] - Chunqiu Electronics is experiencing steady revenue growth driven by the recovery in the PC market and the ramp-up of its magnesium alloy business for automotive applications [6][7]