HK Stock Market Move | Electricity stocks collectively decline as long-term power purchase agreements are signed in Guangdong, Jiangsu, and other places. Institutions say electricity price risks are expected to be resolved.

The collective decline of power stocks, as of the time of writing, Huadian Power International Corporation (01071) fell by 3.75% to 3.59 Hong Kong dollars; China Longyuan Power Group Corporation (00916) fell by 3.28% to 5.6 Hong Kong dollars; CHINA RES POWER (00836) fell by 2.76% to 16.94 Hong Kong dollars; Huadian Power International Corporation (00902) fell by 2.5% to 3.9 Hong Kong dollars. On the news front, on December 23, the Guangdong Power Exchange Center announced the "Guangdong Power Market 2025 Annual Trading and Annual Green Power Trading Results", with a total trading volume of 3410.94 billion kWh at an average price of 391.86 millicents/kWh, a decrease of about 7.4 millicents/kWh. Morgan Stanley previously pointed out that the 2025 electricity price in Guangdong Province is slightly lower than market expectations, which is expected to make the profitability of coal-fired power companies more fragile. Guosheng Securities stated that the signing of long-term electricity price contracts in Guangdong, Jiangsu, and other regions, may help to clear electricity price risks. The market should not overly worry about "lowering electricity prices", as with the improvement of the electricity market construction, eventually a price reflecting the real value of electricity products based on comprehensive costs will be formed. In addition, we believe that regional differentiation will continue to be more pronounced, and we recommend focusing on regions with tight supply and demand dynamics and low electricity price risks. Furthermore, the premium for new energy environmental benefits is expected to be realized, so we suggest prioritizing wind power investment opportunities.