Huatai Securities: Optimistic about the increase in profitabilty from the repair of the year-on-year growth rate of thermal power generation in the third quarter.

Huatai Securities research report indicates that, reviewing the mid-year report of public environmental protection companies for 2025, thermal power in the power industry benefits from the decline in coal prices, with most sample companies seeing an increase in net profit per kilowatt hour compared to the same period last year. During the peak summer period, the year-on-year growth rate of thermal power utilization hours is expected to improve compared to the second quarter, and it is optimistic that the year-on-year growth rate of thermal power generation in the third quarter will bring about an improvement in profitability; hydropower performance is more visibly affected by water inflow; green energy performance is lower than expected, mainly due to factors such as the increase in power limits and declining electricity prices in the second quarter, but some companies have seen an improvement in year-on-year free cash flow, and the performance in the third quarter mainly depends on wind/solar resource conditions and subsidy repayment schedule; nuclear power approvals are accelerating, and the commissioning of projects under construction is expected to contribute to profit growth for leading nuclear power companies. Natural gas supply and demand are relatively loose, putting pressure on gas profitability, with expectations for residential pricing to continue to improve gross margins. Free cash flow for environmental protection companies may continue to improve.