According to Zhito Finance APP, Guozheng International released a research report stating that even though the social electricity consumption growth rate in October was 4.3%, which was a month-on-month decline, the cumulative electricity consumption growth rate from January to October was 7.6%, maintaining high-speed growth. Meanwhile, analyzing by industry, the slowdown in electricity consumption growth from urban and rural residents was one of the main reasons for the decrease in the social electricity consumption growth rate in October, which was more due to seasonal impacts from the end of hot weather, and October has the National Day holiday, which is usually the low point of social electricity consumption in the second half of the year. The report believes that the expectation for overall social electricity consumption this year remains at a relatively high-speed growth. Meanwhile, wind power generation is expected to marginally improve in the second half of the year as wind resource conditions gradually improve.

Currently, the overall valuation of the power operation sector in the Hong Kong stock market is still relatively low, with several stocks offering dividend yields exceeding 6%. The report suggests that investors focus on high-quality power operators with low valuations and high dividends, such as china res power (00836), china power (02380), and china longyuan (00916), which will benefit from improving marginal wind resources.

The main points of Guojing International are as follows:

In October, the total social electricity consumption grew by 4.3% year-on-year, with a decline in growth rate month-on-month.

According to data published by the National Energy Administration, the total social electricity consumption in October was 774.2 billion kilowatt-hours, increasing by 4.3% year-on-year. Compared to September's year-on-year growth rate of 8.5%, this represents a decline of 4.2 percentage points month-on-month. The cumulative total social electricity consumption from January to October reached 8183.6 billion kilowatt-hours, with a year-on-year growth of 7.6%, maintaining relatively high-speed growth. The report believes that despite the month-on-month decline in October's social electricity consumption growth rate, October is usually the low point for electricity consumption in the second half of the year, influenced by factors such as weather and the National Day holiday, therefore the monthly performance has relatively little impact on the annual electricity demand. The social electricity consumption from January to October maintained a growth of 7.6%, and it is expected that this year's social electricity consumption will continue to maintain relatively high-speed growth, with the overall demand space for the electrical utilities industry remaining at a high level.

The growth rate of electricity consumption among urban and rural residents has declined significantly month-on-month, influenced by the end of hot weather.

In terms of industrial electricity consumption, in October, the primary sector's electricity consumption was 10.6 billion kilowatt hours, up 5.1% year-on-year; the secondary sector's electricity consumption was 533.7 billion kilowatt hours, up 2.7% year-on-year; the tertiary sector's electricity consumption was 136.7 billion kilowatt hours, up 8.4% year-on-year; and urban and rural residents' electricity consumption was 93.2 billion kilowatt hours, up 8.1% year-on-year. Compared with the data from September, the year-on-year growth rates for the primary, secondary, and tertiary sectors as well as urban and rural residents' electricity consumption in September were 6.4%, 3.6%, 12.7%, and 27.8% respectively. The year-on-year growth rate for urban and rural residents' electricity consumption declined the most month-on-month, mainly attributed to the end of hot weather, which resulted in a seasonal drop in electricity consumption.

In October, power generation from large-scale enterprises grew by 2.1% year-on-year.

According to data from the National Bureau of Statistics, in October, the industrial power generation of large-scale enterprises reached 731 billion kilowatt hours, a year-on-year increase of 2.1%, maintaining steady growth, but the month-on-month growth rate fell by 3.9 percentage points compared to September. From January to October, the industrial power generation of large-scale enterprises totaled 7802.7 billion kilowatt hours, up 5.2% year-on-year, maintaining relatively rapid growth. By category, in October, wind power generation grew by 34%, the fastest growth, accelerating by 2.4 percentage points compared to September; thermal power growth slowed to 1.8%; solar energy grew by 12.6%; and hydropower declined by 14.9%.

Risk warning: Slowdown in social electricity consumption growth; significant fluctuations in coal prices; fluctuations in wind resources.