Guotai Haitong: Stable electricity and coal prices have performed well after the first mention of anti-internal competition in the electricity sector.

Guotai Haitong released a research report stating that before the National Day, the State-owned Assets Supervision and Administration Commission held a meeting, requiring the stabilization of electricity and coal prices, and preventing vicious competition. The electricity industry first proposed measures against vicious internal competition, and in the first week after the holiday, the performance of the power sector was good (Huaneng Power International, Inc. and Huadian Power International Corporation both rose by more than 3%). As the Q3 quarterly reports approach, it is estimated that the growth rate of thermal power companies in Q3 will continue to increase, with a forecast range of mainly between 30-80%, and the performance of traditional thermal power industry leaders is expected to be good. Guotai Haitong's main points are as follows: During the National Day period, the lowest electricity prices performed better than previous holidays. According to statistics on spot electricity prices, during the 8-day National Day holiday in Shandong, only 1 day had a negative spot price, which was better than the 5 days with negative spot prices during the 7-day National Day holiday last year. This may be due to a sharp increase in electricity consumption from hotels, restaurants, entertainment services, etc., overturning the previous stereotypical impression of low electricity consumption during holidays and compensating for the decrease in industrial load. The plan and cost of reducing carbon in coal-fired power generation and co-firing. According to Electric Union's public account, CCUS technology is mature but energy consumption and costs are still high. It is estimated that China's potential for carbon sequestration can reach 50 million to 100 million tons per year; deep saline aquifer sequestration capacity can exceed trillions of tons. Co-firing biomass technology is mature but limited by biomass resource scale, collection, location, and timing constraints. Ammonia co-firing in coal-fired power generation has been preliminarily verified, achieving a co-firing ratio of 25% to 35%, and the technology is becoming increasingly mature; the cost of green ammonia needs to decrease. It is estimated that the long-term carbon reduction for coal-fired power generation will be about 50%, with total costs not exceeding those of gas power. Additionally, the article believes that the unit investment for flexible and efficient coal-fired generating units is expected to increase by about 100 yuan per kilowatt compared to conventional coal-fired generating units. Hydropower performance in Q3 is generally good. Due to better water conditions in the past three quarters, Guizhou Qianyuan Power announced on October 10 that it is expected to achieve a net profit increase of 70%-100% year-on-year to 450 million-530 million yuan in the first three quarters, with a 23.6% increase in water flows and a 50% increase in electricity generation to 7.9 billion kilowatt-hours. By the end of the first three quarters of 2025, Guangxi Guiguan Electric Power had generated 31.8 billion kilowatt-hours, a year-on-year increase of 14.9%; among which, hydropower accounted for 28.2 billion kilowatt-hours, a year-on-year increase of 21.9%. In the first half of 2025, Guangxi Guiguan Electric Power generated 16.2 billion kilowatt-hours, a year-on-year decrease of 7.74%. Three Gorges Group disclosed that from October 1 to 8, a total of 12.98 billion kilowatt-hours of electricity was generated, a year-on-year increase of 71.4%; of which, hydropower generation totaled 11.1 billion kilowatt-hours, a year-on-year increase of 114%. During the holiday period, the Hubei Energy Group affiliated with Three Gorges Group's Shuibuya, Gehenyan, and Gaobazhou cascade power stations collectively generated 217 million kilowatt-hours, a year-on-year increase of 299%. Risk factors: Market style fluctuates greatly due to economic growth expectations and monetary policy; the direction of electricity marketization is determined, but the development timing is uncertain.