Sprint energy conservation, energy-intensive industrial use of electricity is limited

Information Source:Huadong Cable Group-Zhengzhou Hongliang Cable Co., Ltd24 fiber  Release date:13/11/2013

August, the monthly electricity consumption up 14.4% over the July increase of 1.7%.But the sub-industry consumption trends in polarization. Under the influence of the high temperatures, the tertiary industry, and residential electricity volume there was a substantial increase of the monthly chain. 8 months late, however, have started to sprint around the "five" emission reduction mandate, limiting consumption of high energy consumption industries. Electricity consumption of secondary industry chain in August dropped 2.6% in July.

September, the local emission reduction targets sprint arduous task, to limit consumption of high energy consumption industries will continue, year on year growth rate of electricity consumption is expected to be significantly decreased, unchanged or declined slightly. Decline in energy demand will continue to transfer to the upstream coal industry, coal supply and demand to maintain a relaxed atmosphere pattern.

Sub-regional electricity price adjustment is expected to strengthen

Recently, the market is expected to Shanxi, Hebei, Shandong and other places will be a slight increase in electricity price. This is expected to meet before we judge, Shanxi, Hebei, Shandong and other places coal price increase large, beyond the tolerance range of power generation companies, in the first half of thermal power companies in the region generally poor profits or losses. Electricity price increase will reduce the loss of thermal power companies, is expected to reach the breakeven point. However, we believe that sub-regional electricity price adjustment can help the thermal power industry profits bottomed out, but the economic recovery is still ongoing more dependent on coal prices continued to drop. And by the impact of effective supply, the current coal remains high in the economy, so the thermal power industry, the economy bottomed out, but the recovery effort is not yet clear.

Southwest of the third quarter, a marked improvement in water runoff, is expected to Guizhou source of electricity, Wenshan Electric Power, electric power company's performance crown better. At the same time, we are optimistic about a quarter of hydropower regulation in the fourth quarter earnings outlook.

Integration of active asset

August-September, the assets of the power industry consolidation behavior of an active, built the energy, Top Energy, Kowloon Power have announced the asset integration. Jingneng Thermal Power, Suiheng Yun A, Qian source of electricity, Yuedian A and other companies are also moving forward additional issues. Integration of capital assets in the power industry will continue to be persistent hot spots.

With the current valuation levels, we believe that most of the focus of the company are located in a reasonable range of valuation, to maintain "neutral" rating on the industry, continue to focus on margin of safety with the valuation and the expected integration with the assets of the company.

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