Investment strategy and portfolio. Affected by the negative factors such as the significant advance loss of thermal power performance, the continuous high coal price and the fact that the new installed capacity of some enterprises was less than expected, the power sector corrected with the overall market in the first quarter. We believe that the above negative factors have been reflected in the current stock price, and the concerns about the dual carbon target and scenery growth have been eliminated. The development logic of the industry has not changed, and the short-term negative news has been basically digested. It is suggested to focus on stocks with long-term growth, higher certainty in the realization of the objectives of the 14th five year plan and relatively reasonable current valuation. It is suggested to focus on China National Nuclear Power Co.Ltd(601985) , Huaneng Power International Inc(600011) , Shenergy Company Limited(600642) , Guangdong Electric Power Development Co.Ltd(000539) , Jiangsu New Energy Development Co.Ltd(603693) , Jilin Electric Power Co.Ltd(000875) , Huaneng Lancang River Hydropower Inc(600025) .
Market review: in March, public utilities fell 9.61%, 2.09 percentage points lower than the Wande all a index. In terms of sub sectors, comprehensive power services, thermal power, hydropower, thermal services, photovoltaic and wind power changed by – 9.76%, – 13.04%, – 5.75%, – 3.73%, – 14.34%, – 15.72% respectively.
Industry high frequency data tracking: as of February 2022, the cumulative value of power consumption in the whole society was 1346.7 billion kWh (a year-on-year increase of 5.79%), the cumulative value of national power generation was 1314.1 billion kWh (a year-on-year increase of 4%), and the cumulative value of utilization hours of national power generation equipment was 597 hours (a year-on-year decrease of 8 hours).
News and policies of key industries: 1) the national development and Reform Commission issued the “14th five year plan” for modern energy system. By 2025, the total installed capacity of power generation will reach about 3 billion kw; 2) The national development and Reform Commission deployed and arranged the supervision of medium and long-term coal contracts in 2022, emphasizing that all medium and long-term coal contracts in 2022 were entered and confirmed through the online platform of the national coal trading center, and the integrity performance commitment was signed online; 3) National Energy Administration: by the end of February, the installed capacity of power generation in China was about 2.39 billion kw; 4) From January to February, the electricity consumption of the whole society increased by 5.8%.
Announcement of key companies: 1) Jilin Electric Power Co.Ltd(000875) ( Jilin Electric Power Co.Ltd(000875) . SZ): the net profit attributable to the parent company in 2021 was 450 million yuan, a year-on-year decrease of 5.79%; 2) Zhongmin Energy Co.Ltd(600163) ( Zhongmin Energy Co.Ltd(600163) . SH): the net profit in the first quarter is expected to increase by 51.0% ~ 81.0% year-on-year; 3) China National Nuclear Power Co.Ltd(601985) ( China National Nuclear Power Co.Ltd(601985) . SH): from January to February 2022, the net profit attributable to the parent company increased by 50% year-on-year.
Risk warning: the growth rate of power consumption in the whole society is lower than expected; Repeated epidemics have led to the planned resumption of work and production falling short of expectations; The downward trend of power coal price is less than expected; Market trading spreads fluctuated sharply.
