Core Insights - China Power Construction Corporation (China Power) announced a significant increase in new contract amounts for hydropower projects, with a total of 686.7 billion yuan signed in the first half of 2025, marking a year-on-year growth of 5.83% [2] - The energy and power sector was the primary contributor, with new contracts amounting to 431.4 billion yuan, reflecting a year-on-year increase of 12.27% [2] - Hydropower and wind power saw remarkable growth, with new contracts for hydropower increasing by 66.67% to 100.5 billion yuan, while wind power contracts surged by 68.78% to 142.9 billion yuan [2][4] Business Performance - The total number of new contracts in the energy and power sector reached 2,939, with a total contract value of 431.4 billion yuan [4] - Hydropower projects accounted for 576 new contracts, with a total value of 100.5 billion yuan, while pumped storage hydropower projects contributed 413.8 billion yuan [4] - Wind power projects had 652 new contracts valued at 142.9 billion yuan, while solar power contracts decreased by 28.55% to 113.7 billion yuan [4] Market Reaction - Following the announcement of the Yarlung Tsangpo River hydropower project, China Power's stock experienced a rare limit-up, closing at 5.59 yuan per share, with a market capitalization reaching 962.9 billion yuan [2][3] - The stock's trading volume surged, with closing orders exceeding 7 million shares, more than seven times the daily trading volume [2][3] Industry Position - China Power is recognized as a leading global player in hydropower construction, holding over 65% of China's large and medium-sized hydropower station construction tasks and over 50% of the global market [7] - The company is expected to secure approximately 21.8 to 29.1 billion yuan in project volume from the Yarlung Tsangpo River hydropower project based on its market share [7]

Core Viewpoint - China Power Construction Corporation (China Power) has reported a significant increase in new contract amounts for hydropower projects, driven by the recent launch of the Yarlung Tsangpo River hydropower project, leading to a surge in stock prices [2][4]. Summary by Sections New Contract Amounts - From January to June 2025, China Power signed new contracts totaling 686.699 billion yuan, representing a year-on-year growth of 5.83% [2]. - The energy and power sector contributed the majority, with new contracts amounting to 431.388 billion yuan, up 12.27% year-on-year [3]. Hydropower and Wind Power Growth - Hydropower contracts saw a remarkable year-on-year increase of 66.67%, reaching 100.455 billion yuan [3]. - Wind power contracts also experienced substantial growth, with a year-on-year increase of 68.78%, totaling 142.902 billion yuan [3]. Decline in Traditional Power Sources - Traditional thermal power contracts plummeted by 62.03%, falling below 20 billion yuan [3]. - Solar power contracts also declined by 28.55%, although they remained above 100 billion yuan [3]. Yarlung Tsangpo River Project - The Yarlung Tsangpo River hydropower project officially commenced on July 19, with a total investment of approximately 1.2 trillion yuan [4]. - The project will consist of five tiered power stations, primarily focusing on power transmission outside Tibet while also addressing local consumption needs [4]. Market Reaction - Following the announcement of the Yarlung Tsangpo project, China Power's stock surged to a limit-up, closing at 5.59 yuan per share, with a market capitalization reaching 96.29 billion yuan [4]. - The trading volume on that day was significantly high, with closing orders exceeding 7 million, more than seven times the average trading volume [4]. Market Position - According to Everbright Securities, China Power holds a leading position in the global hydropower construction market, with over 65% of large and medium-sized hydropower projects in China under its management [4][5].

Investment Rating - The industry rating is "Outperform the Market" (maintained rating) [4] Core Viewpoints - The western fixed asset investment (FAI) is experiencing high growth, with the issuance of special bonds accelerating, which will provide stronger support for infrastructure [1][21] - The GDP growth rate in the western region from 2019 to 2024 has reached a compound annual growth rate (CAGR) of 7%, with significant support from central financial policies and national strategic planning [28][32] - The issuance of special bonds in the central and western regions has significantly accelerated, with a notable increase in new special bonds in provinces like Sichuan and Shaanxi [21][32] Summary by Sections 1. High Prosperity of Western Fixed Asset Investment - The western region has maintained double-digit growth in FAI, with provinces like Inner Mongolia, Xinjiang, and Tibet showing strong performance [1] - The issuance of special bonds has increased significantly, with Sichuan's issuance up by 162% year-on-year [21] 2. Investment Opportunities in Key Regions - **Sichuan-Chongqing**: The transportation planning investment in Sichuan during the 14th Five-Year Plan is expected to increase by 16.5% compared to the previous plan, benefiting local construction companies [2][36] - **Tibet**: Active mining and robust infrastructure projects are expected to drive high regional investment demand, with significant projects like the construction of major copper mines [2][48] - **Xinjiang**: The coal chemical industry is thriving, with nearly 500 billion yuan invested in the past five years, and the region is expected to see continued infrastructure support [3][60] 3. Major Infrastructure Projects Boosting Regional Investment - The construction of the Pinglu Canal is expected to significantly enhance water transport infrastructure in Guangxi, with a total investment of approximately 727 billion yuan [3] - The Western Land-Sea New Corridor is projected to connect multiple provinces and enhance regional infrastructure growth, with completion expected by 2035 [3][60] 4. Investment Recommendations - Key stocks recommended include Sichuan Road and Bridge, China Chemical, and China Energy Engineering, all rated as "Buy" [9][47]