Founder: Weak beta in the electricity industry, looking for structural alpha.

Founder released a research report stating that the current period is the end of the year electricity price negotiation period. Guangdong, Anhui, South Grid of Hebei, Shaanxi, and other areas have successively introduced policies to restrict the price difference between wholesale and retail electricity, which is expected to curb the arbitrage model of selling electricity companies that have been gambling on one-sided declines in the past and provide some support for the formation of long-term contracted electricity prices for 26 years. In addition, under the influence of the linkage of coal and electricity prices, with the background of coal price supply-side control, next year's electricity price decline may also be less than market expectations; coupled with the general increase in capacity electricity prices in various regions starting next year, the bank believes that the negative impact of thermal power electricity prices may be somewhat alleviated to a certain extent. In terms of new energy, the results of the competitive bidding for new energy increment projects in some areas have been announced. In general, the bid prices for competitive bidding are lower than those for existing projects. Considering that wind power prices are generally higher, and offshore wind projects have relatively excellent grid connection conditions, with the introduction of offshore wind construction plans in many areas, there is great potential for future development. The main points of view of the Founder are as follows: Thermal power: Stable coal prices, focusing on regional and growth By 2025, the downward pressure on long-term contracted electricity prices in many regions has attracted high-level attention. With the combination of policies such as the restriction of wholesale and retail price differentials introduced in many places such as Guangdong to curb irrational competition, and the general increase in capacity electricity compensation ratios starting in 2026, the biggest negative impact of unilateral downward electricity prices is gradually being cleared. At the same time, the policy of "anti-inward rolling" of coal strengthens supply constraints, costs tend to be controllable, and the industry is transitioning from "killing both price and quantity" to a new stage of "stable prices and increased revenue", which is expected to drive a revaluation of the sector's value. Hydropower: Profit resilience and cost improvement highlight the scarcity value of high dividends By 2025, China's hydropower generation has stabilized and rebounded, especially with a nearly 30% year-on-year increase in single-month output in September and October, showing marginal improvement. Looking ahead, with the gradual expiration of existing units and reduction in financial expenses, the profitability of hydropower companies is expected to further improve. Meanwhile, in the context of asset shortage, the high and sustainable dividend policy of major hydropower companies highlights their defensive attributes and investment value. New energy: Downward pressure on electricity prices suppresses short-term growth, but does not change long-term growth space By 2025, the new energy sector is showing a pattern of "short-term pressure, long-term improvement". The market-oriented decline in nuclear power prices has suppressed revenue growth, and policy adjustments in Guangdong and elsewhere, as well as the structural impact of the reduction of value-added tax incentives for new units, but the long-term acceleration of approvals and technological breakthroughs have solidified growth space. Wind and solar installations continue to grow at a high rate, but the pressure on grid connection is increasing. Although policies such as the "Document No. 136" have put pressure on incremental project prices, green electricity consumption policies and marginal improvements in cash flow for some companies provide support for the healthy development of the industry.