One week market review: this week, the CSI 300 index rose 2.23%, the public utilities index rose 1.57%, the environmental protection index rose 2.36%, and the weekly relative returns were – 0.66% and 0.13% respectively. Among the 31 primary industry categories of Shenwan, public utilities and environmental protection ranked 21st and 15th. Among the sub sectors of the power sector, thermal power rose by 0.88%; Hydropower fell by 0.02%, and new energy power generation rose by 7.86%; Water sector rose 0.57%; Gas sector rose 0.84%; Testing services fell 1.10%.
Important event: on May 18, the SASAC held a special promotion meeting on deepening the reform of state-controlled listed companies and striving to be an example of state-owned enterprise reform. At the meeting, the deputy director of the SASAC pointed out that the group company should systematically sort out the unlisted and listed resources, gradually inject the existing unlisted high-quality assets into the listed companies in a planned way in combination with the actual situation, and can also be listed separately if necessary.
Special research: 1. 60%, 45%, 97%, 59%, 21% and 87% of the new energy installed capacity of Huaneng Group, national energy group, Huadian Group, state power investment group, China Datang Group and Cgn Power Co.Ltd(003816) group are not listed in the assets of its listed companies; 2. Since this year, the growth rate of power consumption in most industries in China has been at a low level in recent three years, and the growth rate of power consumption in photovoltaic, mining and chemical industries has been at a high level in recent three years. The growth rate of power consumption in the wind and solar equipment manufacturing industry still ranks first, but the growth rate has slowed down; The consumer industry rebounded, and the real estate industry fell sharply.
Investment strategy: Public Utilities: 1. The reform of electricity marketization is promoted, and the electricity price can better reflect the value of supply and demand, cost and environment. The construction cost of new energy continues to decline. New energy operators have “triple” certainty, and the growth rate of “quantity” – scenery installation has high certainty; “Price” – the price of thermal power rises, the green premium is superimposed, and the profit space of green power is opened; “Performance” – last year’s low-cost fans and rush to install sea breeze ensured this year’s performance. 2. The policy promoted the optimal combination of coal and new energy, the coal price restriction policy is expected to be implemented, and the turning point of thermal power profit appears. 3. The construction of new power system with new energy as the main source will deeply benefit new energy power producers and comprehensive electric energy services. It is recommended to have the expectation of pumped storage and chemical energy storage assets injection, and the leader of auxiliary services in the future Yunnan Wenshan Electric Power Co.Ltd(600995) ; Recommend good cash flow, “nuclear power and new energy” two wheel drive China National Nuclear Power Co.Ltd(601985) ; Recommend actively transforming new energy with abundant cash flow, leading thermal power Huaneng Power International Inc(600011) , China power, etc; New energy operation leader with capital cost and resource advantages China Three Gorges Renewables (Group) Co.Ltd(600905) ; Comprehensive electric energy service Suwen Electric Energy Technology Co.Ltd(300982) . Environmental protection industry: 1. High performance and low valuation; 2. The business model is improved, and the operation indicators continue to improve: 3. The stable growth operation attribute appears, and the yield and cash flow indicators continue to improve. Environmental protection industry: 1. High performance and low valuation; 2. The business model is improved, and the operation indicators continue to improve: 3. The stable growth operation attribute appears, and the yield and cash flow indicators continue to improve.
Risk warning: the policy is not as expected; The growth rate of power consumption decreased; Electricity prices have been lowered.
