20180528-广发证券_香港_-Power_Sector_Monthly_4页_635kb

Power Sector Monthly Summary

Core Content

This report provides an analysis of the power sector performance in April 2018 and the cumulative results from January to April. It highlights the key factors influencing power consumption and generation, as well as the implications for the sector's profitability and future outlook.

Main Points

Power Consumption Growth

• National Power Consumption (Jan-April 2018): Increased by 9.3% YoY, reaching 2109.4bn kWh.
• April Power Consumption: Rose by 7.8% YoY, to 521.7bn kWh.
• Industrial Power Consumption (April): Grew by 5.8% YoY, with secondary industry consumption increasing by 7.2% YoY.
• Factors: The delayed production resumption following the Chinese New Year (CNY) holiday in 2018 and the end of production suspensions due to environmental efforts and the Two Sessions contributed to the surge in April power consumption.

Power Generation Growth

• National Power Generation (Jan-April 2018): Increased by 7.7% YoY, totaling 2087.7bn kWh.
• April Power Generation: Grew by 6.9% YoY, to 510.8bn kWh.
• Sector Growth:
  • Thermal Power: Up 7.1% YoY
  • Hydropower: Up 1.3% YoY
  • Wind Power: Rapid growth at 29.4% YoY
• Provinces with High Growth: Fujian (25%), Guangxi (23.7%), Ningxia (23.5%).
• Regions with Lower Growth: Tianjin (-0.4%), Beijing (-0.6%), Shandong (-3.8%).

Utilization Hours

• National Utilization Hours (Jan-April 2018): Increased by 42 hours YoY, reaching 1,221 hours.
• Thermal Power Utilization Hours: Up 69 hours YoY, to 1,426 hours.
• Hydropower Utilization Hours: Down 25 hours YoY, to 845 hours.
• Wind Power Utilization Hours: Up 149 hours YoY, to 812 hours.
• Nuclear Power Utilization Hours: Up 62 hours YoY, to 2,287 hours.
• Installed Capacity (Jan-April 2018): Increased by 6% YoY, totaling 1.71bn kWh.
• Thermal Power Installed Capacity: Up 3.7% YoY.
• Hydropower Installed Capacity: Up 3.7% YoY.
• Wind Power Installed Capacity: Up 10.6% YoY.
• Nuclear Power Installed Capacity: Up 604% YoY.

Key Information

Thermal Power Outlook

• Utilization Hours: Continued to rise for 15 consecutive months, indicating strong demand.
• Fuel Cost Pressure: High coal prices (e.g., Rmb38/tonne increase in Qinghuangdao Port) are a concern.
• Cost Control: The increasing proportion of long-term coal contracts is expected to help reduce fuel cost volatility.
• Profitability: The firm utilization of thermal power is expected to offset fixed costs and improve profitability.

Recommended Companies

• Huaneng Power International (600011 CH)
• Huadian Power International (600027 CH)

These companies are highlighted due to their strong performance and potential for improved profitability.

Risks

• Demand and Supply Deterioration
• Downward Adjustment in Power Tariffs
• Fluctuations in Coal Prices

Sector and Company Ratings

Sector Ratings

Company Ratings

Disclaimer

• This report is for informational purposes only and does not constitute an offer to buy or sell securities.
• It is intended for GF Securities (Hong Kong) clients only.
• The research report may not be available in certain jurisdictions.
• No liability is accepted for any loss arising from the use of the materials in this report.
• Investments involve risks, and the price of securities may fluctuate.

Analyst Certification

• The views expressed in this report accurately reflect the personal opinions of the analysts.
• No part of the analysts' remuneration was directly or indirectly connected to the specific recommendations or views in this report.

Disclosure of Interests

• GF Securities (Hong Kong) and its affiliates do not hold any shares of the securities mentioned.
• No investment banking relationship exists with the companies mentioned in the past 12 months.
• Analysts and their associates do not serve as officers of the companies discussed and have no financial interests in the securities.