This week, the performance of the environmental protection and public utilities sectors diverged. The environmental protection (Shenwan) industry index fell 3.03%, a small decline compared with the overall market; The public utilities (Shenwan) industry index rose 1.59%, the largest increase.
This week's plate performance: this week's environmental protection and public utilities plates showed differentiation. The environmental protection (Shenwan) industry index fell 3.03%, a small decline compared with the overall market; The public utilities (Shenwan) industry index rose 1.59%, the largest increase. In the utility sub sector, the power sector rose 1.87%, and the gas sector fell 1.31%. Since 2024, the environmental protection sector has increased by - 6.90%, lagging behind the CSI 300 and GEM; The power sector rose 11.88%, ahead of the CSI 300 and GEM.
Core view: The downward trend of coal price in 2024 will continue the catalytic thermal power market. As the high price of coal in stock affects the profit level in the first half of 2023, with the decline of the coal price center, the performance of thermal power enterprises in the first half of 2024 is expected to achieve higher growth year on year, which has investment value in the environment of defensive market style. At the same time, along with the realization of thermal power performance, it is suggested to focus on the investment opportunities of high dividend and high dividend thermal power enterprises with stable profits.
Push Guodian Power, Funeng, etc. We are optimistic about the investment value of nuclear power and hydropower for a long time, and recommend SDIC Power, China Nuclear Power, etc.
Interpretation of key events in the industry: 1) By the end of April, the country's cumulative installed power generation capacity had reached 3.01 billion kilowatts,+14.1% year-on-year. Among them, the growth of thermal power, hydropower and nuclear power installation slowed down, while the growth of wind power and photovoltaic installation increased. 2) The State Grid Energy Institute released the China Power Supply and Demand Analysis Report 2024. According to the forecast, the whole society's electricity consumption in 2024 will reach 9.8 trillion kilowatt hours, and by the end of 2024, the national installed power generation capacity will reach 3.32 billion kilowatts.
Key industry data tracking: 1) Both domestic and imported coal prices rose, and coal stocks at major ports increased.
As of May 24, 2024, the market price of Qinhuangdao steam coal (Q5500) is 890 yuan/ton, up 4.7% from May 17, 2024; The market price of Indonesian bituminous coal (Q4200) at Guangzhou Port is 718 yuan/ton, up 0.1% from May 17, 2024. As of May 17, 2024, the FOB price of Newcastle steam coal was 141.27 US dollars/ton, down 3.7% on a week on week basis. 2) Water level of the Three Gorges: This week, the water level and storage capacity of the Three Gorges Reservoir decreased year on year and month on month. 3) Prices of silicon materials and components: The prices of silicon materials and silicon wafers fell this week. 4) Natural gas price: both the CIF price of LNG and the ex factory price of domestic LNG rose this week.
As of May 23, 2024, the CIF price of LNG is 12.32USD/million British thermal (4640 yuan/ton), up 12.2% from May 16, 2024; As of May 24, 2024, the ex factory price of domestic LNG is 4348 yuan/ton, up 1.3% from May 17, 2024. 5) Spot day ahead trading market:
This week, the weighted average price of power generation side in Guangdong Province reached the highest value of 318.46 yuan/MWh on May 22 (Wednesday), down 3.4% month on month. Medium and long term trading market: From May 20 to May 24, the turnover of electricity in the medium and long term electricity direct trading market in Shandong Province reached 3.475 billion kilowatt hours, an increase of 27.3% month on month; The weighted average transaction price in the same period was 358.55 yuan/MWh, down 0.4% month on month. 6) Carbon market: The weekly turnover of carbon emission quota (CEA) in the national carbon market this week was 1.1119 million tons, an increase of 660.9% month on month, with a weekly turnover of 103 million yuan and an average transaction price of 92.20 yuan/ton.
Key events in the industry: the Notice on Key Work of Cost Reduction in 2024 issued by the General Office of the National Development and Reform Commission and other four departments, and the Implementation Plan of "Environmental Basic Loan" in Jiangsu Province issued by the Ecological Environment Department of Jiangsu Province.
Risk warning: the implementation of policies is lower than expected, the prices of coal and silicon materials fall, the project progress is lower than expected, and the international political situation changes.
