Guosheng Securities: The year-on-year increase in social electricity use and power supply in November suggests focusing on thermal power flexibility transformation leaders, etc.

The Zhitong Finance App learned that Guosheng Securities released a research report saying that the National Energy Administration announced the electricity consumption situation for January-November, and the National Bureau of Statistics announced the energy production situation for November. In January-November and November, the electricity consumption of the whole society increased year-on-year; on the supply side, electricity production increased steadily in November, and the landscape growth rate accelerated markedly. It is recommended to focus on high-dividend thermal power companies with dividends, companies with relatively stable electricity prices & integrated coal power, and leaders in thermal power flexibility transformation while grasping the defensive nature of hydropower and nuclear power. The gas sector suggests focusing on high-quality leaders that fix profits while stabilizing dividends.

Guosheng Securities's main views are as follows:

Demand side: The electricity consumption of the entire national society increased 6.2% year-on-year in November

According to data released by the National Energy Administration, in January-November, the total electricity consumption of the entire society was 9460.2 billion kilowatt-hours, an increase of 5.2% over the previous year, of which large-scale industrial power generation was 8856.7 billion kilowatt-hours. In November, the entire society consumed 855.6 billion kilowatt-hours of electricity, an increase of 6.2% over the previous year.

Overall, the tertiary sector and urban and rural residents' electricity consumption grew at a relatively high rate in November, and the charging and switching service industry and the information transmission, software, and information technology service industries played a significant driving role. Demand for electricity in the primary sector grew steadily. The monthly electricity consumption in November increased 7.9% year on year, and the cumulative electricity consumption in January-November increased 10.3% year on year. The growth rate of electricity consumption in the second production slowed down compared to the previous month. Electricity consumption in November increased 4.4% year on year, and the cumulative electricity consumption in January-November increased 3.7% year on year. Among them, the high technology and equipment manufacturing industry's electricity consumption growth rate (+6.4%) was relatively leading. Electricity consumption in the tertiary sector showed strong growth. The monthly electricity consumption in November increased 10.3% year on year, and the cumulative electricity consumption in January-November increased 8.5% year on year. Among them, electricity consumption in the charging and switching service industry and the information transmission, software and information technology service industries became the main driving force. The monthly growth rates reached 60.2% and 18.9% respectively in November. The domestic electricity consumption of urban and rural residents was driven by the peak of winter. The monthly electricity consumption in November increased 9.8% year on year, and the cumulative electricity consumption in January-November increased 7.1% year on year.

Supply side: Electricity production increased steadily in November, and the growth rate of scenery accelerated significantly

Overall, industrial electricity production continues to grow according to regulations. In November, according to regulations, industrial power generation was 779.2 billion kilowatt-hours, an increase of 2.7% over the previous year; the average daily power generation capacity was 25.97 billion kilowatt-hours. From January to November, the regulated industrial power generation capacity was 8856.7 billion kilowatt-hours, an increase of 2.4% over the previous year.

By type, in November, according to regulations, industrial thermal power changed from increase to decline, hydropower grew rapidly, the growth rate of nuclear power and solar power generation accelerated, and wind power changed from decline to increase. Among them, regulated industrial thermal power decreased 4.2% year on year, with an increase of 7.3% in October; regulated industrial hydropower grew 17.1%, down 11.1 percentage points from October; regulated industrial nuclear power grew 4.7%, 0.5 percentage points faster than in October; regulated industrial wind power grew 22.0%, down 11.9% in October; and regulated industrial solar power grew 23.4%, 17.5 percentage points faster than October.

Investment advice

It is recommended to focus on leading thermal power companies with dividends and relatively stable electricity prices & integrated coal and electricity companies: Huaneng International (A+H), Guodian Electric Power, Datang Power, Inner Mongolia Huadian, Shaanxi Energy; as well as thermal power flexible transformation leaders: Qingda Environmental Protection and Huaguang Environmental Energy. It is recommended to focus on the wind power and photovoltaic sectors: Xintian Green Energy, Longyuan Power, Zhongmin Energy, etc. To grasp hydronuclear defense, it is recommended to focus on Changjiang Electric Power, Sichuan Investment Energy, China Nuclear Power, and China General Nuclear Power. In the gas sector, it is recommended to focus on leading high-quality urban combustion companies that recover profits while stabilizing dividends, Xinao Energy, Kunlun Energy, and China Resources Gas.

Risk warning: 1. The progress of thermal power construction falls short of expectations. 2. Rising coal prices. 3. Policies such as the electricity auxiliary services market fell short of expectations.