Investment Rating - The report maintains an "Outperform" rating for the public utility and environmental sectors [1][8]. Core Insights - The report emphasizes the importance of the "environment + resource products" investment logic, highlighting that many environmental companies possess resource attributes and can extract valuable materials from waste [2][16]. - The report notes a decline in the utilization rates of photovoltaic and wind power generation in 2025, with a focus on the implications for investment strategies in the sector [1][14]. Summary by Sections Market Review - The Shanghai Composite Index rose by 2.79%, while the public utility index increased by 2.54% and the environmental index by 3.88% [1][24]. - In the power sector, coal and electricity prices are expected to decline, but profitability for thermal power is anticipated to remain reasonable [22]. Important Events - From January to November 2025, the national photovoltaic and wind power generation utilization rates were 94.8% and 94.3%, respectively, showing a year-on-year decline [1][14]. - The report discusses the implementation of the "Renewable Energy Green Power Certificate Management Implementation Rules," which will affect the issuance of green certificates for renewable energy [15]. Investment Strategy - Recommendations include major thermal power companies like Huadian International and Shanghai Electric, as well as leading renewable energy firms such as Longyuan Power and Three Gorges Energy [22]. - The report suggests focusing on environmental companies with stable cash flows and growth potential, such as China Everbright Environment and Shanghai Industrial Holdings [23]. Key Company Profit Forecasts and Investment Ratings - Huadian International (600027.SH) is rated "Outperform" with an expected EPS of 0.46 for 2024 and a PE ratio of 10.2 [8]. - Longyuan Power (001289.SZ) is also rated "Outperform," with an expected EPS of 0.75 for 2024 and a PE ratio of 20.4 [8]. - China Nuclear Power (601985.SH) is rated "Outperform" with an expected EPS of 0.46 for 2024 and a PE ratio of 21.2 [8].

Group 1 - The core point of the article highlights the performance of the HuShen 300 ESG ETF managed by Southern Fund Management, which experienced a decline of 4.80% as of the midday close on January 13, with a trading volume of 637,100 yuan [1] - The top holdings of the ETF include companies such as CATL, Kweichow Moutai, and BYD, with varying performance; for instance, CATL rose by 0.24%, while Kweichow Moutai fell by 0.30% [1] - Since its inception on April 13, 2023, the ETF has achieved a return of 21.37%, with a monthly return of 4.63% [1] Group 2 - The ETF's performance benchmark is the HuShen 300 ESG Index return rate, indicating its focus on sustainable investment [1] - The fund manager is Southern Fund Management Co., Ltd., and the fund manager is Li Jialiang [1]

Core Viewpoint - The report highlights significant developments in the utility sector, including the operational commencement of the Zhangzhou Nuclear Power Unit 2 and the establishment of green electricity direct connection projects in Shandong and Hubei, which are expected to enhance clean energy supply and reduce production costs in the hydrogen sector [2][4]. Electricity and Coal Prices - The national average grid purchase electricity price is projected to decrease by 8% year-on-year by January 2026 [3]. - As of January 9, 2026, the price of thermal coal at Qinhuangdao for 5500 kcal is 699 yuan per ton, reflecting a week-on-week increase of 17 yuan [3]. Power Generation and Consumption - Total electricity consumption from January to November 2025 reached 9.46 trillion kilowatt-hours, representing a year-on-year increase of 5.2% [3]. - Cumulative power generation during the same period was 8.86 trillion kilowatt-hours, showing a year-on-year growth of 2.4% [3]. - The breakdown of power generation by source indicates a decline in thermal power by 0.7%, while hydropower, nuclear power, wind power, and solar power saw increases of 2.7%, 8.1%, 9.6%, and 24.8% respectively [3]. New Projects and Developments - The Zhangzhou Nuclear Power Unit 2 commenced commercial operation on January 1, 2026, completing the first phase of the Zhangzhou Nuclear Power project, which is expected to provide approximately 60 billion kilowatt-hours of clean energy annually [2]. - The green electricity direct connection project in Shandong involves a new lithium battery manufacturing base with an annual electricity consumption of 500 million kilowatt-hours and a total scale of 345 MW of renewable energy facilities [2]. - In Hubei, a green hydrogen factory is set to utilize a photovoltaic system on abandoned slopes, aiming to reduce production costs and enhance competitiveness in hydrogen applications [2]. Investment Recommendations - The report suggests focusing on companies in the renewable energy sector, particularly those involved in green electricity and nuclear power, as the market conditions are becoming favorable for high-quality development [4]. - Key recommendations include Dragon Power (001289), Zhongmin Energy (600163), and China Nuclear Power (601985), among others, indicating a positive outlook for these companies based on their growth potential and market positioning [4].

Core Insights - Northbound capital has shown significant growth in trading activity and investment preferences, particularly favoring hard technology and non-ferrous metals sectors in 2025 [1][2][3][7]. Group 1: Market Performance - By the end of 2025, northbound capital held nearly 1.08 trillion shares of A-shares, with a market value surpassing 2.59 trillion yuan, marking a nearly 20% increase from the previous year [2]. - The total trading volume of northbound capital exceeded 50.33 trillion yuan in 2025, representing a more than 40% increase year-on-year, contributing nearly 6% to the overall A-share market trading volume [3]. - The trading activity of northbound capital reached new heights, with 33 trading days exceeding 300 billion yuan, 27 of which occurred in 2025 [3]. Group 2: ETF Trading - Northbound capital's ETF trading volume surpassed 810 billion yuan in 2025, a 76% increase from 2024, indicating a growing preference for ETF investments among foreign investors [4]. - The proportion of ETF trading in the total northbound capital trading volume reached 1.62%, setting a historical high [4]. Group 3: Sector Preferences - The hard technology and non-ferrous metals sectors emerged as the new favorites for northbound capital, with 14 industries seeing holdings exceed 50 billion yuan, and 10 industries surpassing 100 billion yuan [7]. - The electric equipment sector led with a holding value of over 449.6 billion yuan, followed by the electronics sector at over 387 billion yuan, and the non-ferrous metals sector at over 185.5 billion yuan [7]. - The non-ferrous metals sector saw a remarkable growth of over 172% in holdings compared to the end of 2024, reflecting a shift in investment focus [8]. Group 4: Stock Concentration - The concentration of holdings by northbound capital reached a five-year low in 2025, indicating a trend towards diversification in investment strategies [10]. - The top 20 companies held by northbound capital accounted for less than 36% of total holdings, a decrease of over 2 percentage points from 2021 [11]. Group 5: Popular Investment Themes - In 2025, eight out of ten popular investment themes, including commercial aerospace and semiconductor sectors, saw over 50% of their constituent stocks receiving increased holdings from northbound capital [9]. - The commercial aerospace sector, in particular, had over 80% of its stocks increased in holdings, driven by strong market performance and supportive policies [9]. Group 6: Long-term Trends - Eighteen stocks have been consistently increased in holdings for five consecutive quarters, primarily in the machinery, electric equipment, and automotive sectors, indicating strong institutional confidence [12]. - Conversely, 26 stocks have seen reductions in holdings over the same period, mainly in the pharmaceutical, banking, and consumer sectors, reflecting a shift in investment focus [12][13].

Investment Rating - The report maintains an "Overweight" rating for the utility sector [1] Core Insights - The commercial operation of the Zhangzhou Nuclear Power Unit 2 commenced on January 1, 2026, completing the first phase of the Zhangzhou Nuclear Power project, which is expected to provide approximately 60 billion kWh of clean electricity annually [4] - The first green electricity direct connection project in Shandong and Hubei has been approved, with a total scale of 345 MW of new energy facilities, including 75 MW of wind power and 270 MW of photovoltaic power [4] - The average national grid purchase price of electricity in January 2026 decreased by 8% year-on-year [4] - The price of thermal coal at Qinhuangdao port increased by 17 RMB per ton week-on-week, reaching 699 RMB per ton as of January 9, 2026, a year-on-year decrease of 8.98% [4][43] - The inflow and outflow of the Three Gorges Reservoir showed a decrease in inflow by 6.3% and an increase in outflow by 7.2% as of January 9, 2026 [4][50] Industry Data Tracking - Electricity Consumption: In the first eleven months of 2025, total electricity consumption reached 9.46 trillion kWh, a year-on-year increase of 5.2% [12] - Power Generation: Cumulative power generation in the first eleven months of 2025 was 8.86 trillion kWh, with a year-on-year increase of 2.4% [22] - Installed Capacity: As of November 30, 2025, the cumulative installed capacity of thermal power reached 1.52 billion kW, with a year-on-year increase of 5.9% [44] - Hydropower: The cumulative installed capacity of hydropower reached 440 million kW, with a year-on-year increase of 3.0% [54]

Investment Rating - The report rates the gaming industry as "high" for investment [1] Core Views - The report emphasizes the importance of the "Solid Waste Comprehensive Treatment Action Plan," which aims for significant improvements in solid waste management by 2030, including a target of 4.5 billion tons of comprehensive utilization of major solid waste and 510 million tons of recycling of key resources [2][5][7] - It highlights the shift in the energy sector towards diversified revenue models for thermal power companies, recommending several key players in the industry [8] - The report discusses the current trends in natural gas pricing, noting a general decline in global gas prices due to mild weather conditions and stable supply [10][29] - It outlines the transition of hydrogen energy towards becoming a "regulator" of the power grid, emphasizing its role in energy storage and management [31][33] Summary by Sections 1. Environmental Protection - The "Solid Waste Comprehensive Treatment Action Plan" was released on January 4, aiming to enhance solid waste management and promote a green economy [5] - By 2030, the plan targets a comprehensive utilization of 4.5 billion tons of major solid waste and 510 million tons of recycling of key resources [2][6] - The focus is on industrial, urban, and agricultural waste, with a comprehensive governance approach to illegal dumping and construction waste [6][7] 2. Natural Gas - As of January 9, the Henry Hub spot price in the U.S. was $2.87/mmBtu, reflecting a weekly decline of 28.24% [10][11] - The report notes that the European gas prices have also decreased, with the TTF spot price at €29.00/MWh, down 1.43% week-on-week [10][16] - The overall gas market is characterized by stable supply and mild weather, leading to lower demand and prices [10][29] 3. Hydrogen Energy - The report discusses the integration of hydrogen energy into the power grid, highlighting its potential for large-scale energy storage and management [31] - It emphasizes the role of hydrogen in addressing renewable energy challenges and improving grid stability [31][33] - The report recommends companies involved in hydrogen production and technology as key investment opportunities [33] 4. Weekly Market Review - The report notes that the electric power equipment, gas, and environmental protection sectors outperformed the Shanghai and Shenzhen 300 index during the week of January 5 to January 9 [34] - It provides insights into the performance of various sectors, indicating a positive trend for certain energy and environmental stocks [36][39] 5. Company and Industry Dynamics - The report highlights the establishment of national zero-carbon parks, which will receive significant support for green energy initiatives [39] - It mentions the successful completion of green power transactions in Gansu, indicating a growing market for renewable energy [40][43] - The report includes updates on major companies' performance and strategic developments in the energy sector [44]

Investment Rating - The report maintains a positive outlook on the industry, indicating a "Look Favorably" investment rating [1]. Core Insights - The report highlights the release of the "Comprehensive Solid Waste Management Action Plan," which aims to enhance solid waste management and promote a circular economy by 2030, targeting a comprehensive utilization of 4.5 billion tons of major solid waste and 510 million tons of recyclable resources annually [2][6][8]. - Global natural gas prices have generally declined, influenced by mild weather conditions, with significant drops in prices across various markets, including a 28.24% decrease in the US Henry Hub spot price [11][12][18]. - The hydrogen energy sector is evolving towards becoming a key regulator in the power grid, with initiatives to integrate clean hydrogen production and utilization into microgrid systems, enhancing energy storage capabilities [35][37]. Summary by Sections 1. Environmental Protection - The "Comprehensive Solid Waste Management Action Plan" aims for significant improvements in solid waste management by 2030, with specific targets for waste recycling and resource utilization [2][6]. - The plan emphasizes the need for a circular economy that does not rely on subsidies, focusing on industrial collaboration and technological innovation to create a sustainable waste management system [7][8]. 2. Natural Gas - Natural gas prices have seen a significant decline, with the US Henry Hub spot price at $2.87/mmBtu, reflecting a 28.24% week-over-week drop [11][12]. - The report notes that the demand for natural gas is expected to remain weak in Northeast Asia, contributing to a slight decrease in LNG prices [11][30]. - Recommendations include focusing on integrated natural gas companies that are expected to benefit from cost reductions and improved profitability [32]. 3. Hydrogen Energy - The report discusses the strategic positioning of hydrogen energy as a flexible load regulator within the power grid, highlighting its potential to enhance energy storage and consumption efficiency [35][37]. - It emphasizes the importance of hydrogen energy in achieving energy security and autonomy, recommending companies involved in hydrogen production [35][37]. 4. Weekly Market Review - The report indicates that the electricity equipment, gas, and environmental protection sectors outperformed the Shanghai and Shenzhen 300 index during the review period [38]. 5. Company and Industry Dynamics - The report outlines significant developments in the renewable energy sector, including the establishment of national zero-carbon parks and the increase in green electricity trading volumes, which are expected to enhance market opportunities for leading companies in the sector [44][48].

Investment Rating - The report maintains a "Positive" investment rating for the utility sector [8] Core Insights - The adjustment of coal power capacity prices in Tianjin exceeds expectations, with the fixed cost recovery ratio increasing to 70% from January 1, 2026, which is higher than the previously planned minimum of 50% [2][11] - The January 2026 proxy purchase electricity prices show a general decline across most provinces, with significant regional disparities; northern inland areas exhibit more resilience compared to coastal regions facing greater pressure [2][11] Summary by Sections Capacity Price Adjustment - Tianjin's coal power capacity price will rise from 100 yuan per kilowatt per year to 231 yuan, enhancing the fixed cost recovery ratio to 70% [2][11] - The adjustment is expected to yield an increase of approximately 0.035 yuan per kilowatt-hour in electricity pricing, although actual capacity fees may rise more significantly due to declining coal power utilization hours [11] Proxy Purchase Electricity Prices - January 2026 proxy purchase prices show a decline, with Guangdong and Jiangsu reporting average transaction prices of 372.14 yuan per megawatt-hour and 344.19 yuan per megawatt-hour, respectively, reflecting year-on-year decreases of 19.72 yuan and 68.26 yuan [11] - Northern inland regions, such as Inner Mongolia, show a year-on-year increase in proxy purchase prices, while coastal provinces like Guangdong and Jiangsu face declines exceeding 5 fen per kilowatt-hour [11] Investment Recommendations - The report recommends focusing on quality coal power operators such as Huaneng International, Datang Power, and Guodian Power, as well as hydropower companies like Yangtze Power and State Power Investment Corporation [11][16][17] - It also highlights the potential of new energy companies like Longyuan Power and China Nuclear Power, suggesting a favorable long-term outlook for the sector [11][20]

Investment Rating - The report suggests a "Buy" rating for several companies in the power sector, including Huaneng International, Huadian International, Guodian Power, and Datang Power, among others [9]. Core Insights - The National Energy Administration has released detailed regulations for green certificate management, which is expected to reshape market rules and enhance the trading price of green certificates by 2026 [2][14]. - The new regulations clarify that independent energy storage discharge will no longer be eligible for green certificate issuance, which may lead to a reduction in the overall circulation of green certificates and an increase in their trading prices [2][14]. - The guidelines for industrial microgrid construction require that new renewable energy generation in industrial parks must have a self-consumption ratio of at least 60% annually, promoting local production and consumption of green electricity [6][16]. Summary by Sections Green Certificate Regulations - The new regulations maintain the core measurement standard of issuing one green certificate for every 1,000 kWh of renewable energy generated [2][14]. - Independent energy storage discharge will not receive green certificates, and projects must measure generation and storage separately [2][17]. - From January 1, 2026, the production year of the electricity must match the consumption year for green certificate cancellation, changing the previous practice of purchasing historical certificates [2][17]. Industrial Microgrid Guidelines - The guidelines aim to enhance the capacity for local production and consumption of green electricity in industrial sectors [6][16]. - New renewable energy projects in industrial parks must achieve a minimum self-consumption ratio of 60% [6][16]. - The guidelines introduce a requirement for integrating various systems, including renewable energy generation and energy management technologies [6][16]. Market Performance - The report notes that the Shanghai Composite Index rose by 3.82% during the week of January 5-9, with the power and utilities sector index increasing by 2.4%, underperforming the broader market [66][67]. - The report highlights that most listed companies in the power and utilities sector experienced stock price increases during this period [66].

Investment Rating - The report maintains a "Positive" outlook for the utility sector, indicating that the expected settlement price for thermal power in 2026 is likely to be better than market expectations [7]. Core Insights - The long-term contract electricity price risk has materialized, and the average reduction in long-term contract electricity prices for 2026 is estimated to be around 3-4 cents per kilowatt-hour. However, the capacity price for coal-fired power is expected to increase by at least 65 yuan per kilowatt per year, which may lead to a lower-than-expected decline in thermal power settlement prices [7]. - The report highlights that the performance expectations for the utility sector have reached a low point, making low-priced utility assets worth considering for investment [7]. - The report suggests that the utility sector remains a quality dividend asset for long-term allocation, especially under the trend of low interest rates and policies encouraging long-term capital market entry [7]. Summary by Sections Electricity Price Dynamics - The average clearing price for the Guangdong electricity market from January 3 to January 9, 2026, was 321 yuan per megawatt-hour, down 51 yuan year-on-year (-13.7%) [10]. - The average price for Shanxi during the same period was 234 yuan per megawatt-hour, down 107 yuan year-on-year (-31.4%) [10]. Coal Price Trends - As of January 9, 2026, the price of Q5500 thermal coal in Qinhuangdao was 699 yuan per ton, reflecting a week-on-week increase of 17 yuan (+2.5%) [15]. - The coal inventory at Qinhuangdao port decreased by 11.6% week-on-week, indicating a tightening supply situation [21]. Performance of Utility Sector - The utility sector index increased by 2.5% during the week of January 5 to January 9, 2026, underperforming compared to the Shanghai Composite Index, which rose by 2.8% [35]. - The report notes that the gas sector within utilities showed the highest weekly increase of 4.8% [37]. Investment Recommendations - The report recommends focusing on quality dividend assets in the utility sector, particularly in thermal power, hydropower, and nuclear power, with specific stocks highlighted for potential investment [7].