ST Mei Yan drives the recovery of the power sector and expects strong electricity price hikes

ST Meiyan drives the power sector to recover and expects strong electricity price hikes. Recently, the market has increasingly strong expectations for power price hikes, which is also a major factor that stimulates the power sector to strengthen.　　 There was news on the day of the month that the Development and Reform Commission would increase electricity prices in some areas. More reports on Friday confirmed that the rumors of the increase in electricity prices are not without reason. The National Development and Reform Commission has agreed to take the lead in raising electricity prices in Shanxi, with an increase of. Cents per degree. Since the first increase in the region has arrived, the subsequent price adjustments in some regions will also be carried out. .　　 It is understood that the on-grid electricity price in Shanxi Province has always been lower than the domestic average, and thermal power companies have suffered serious losses. By the end of the year, the thermal power companies in Shanxi Province had accumulated losses of 100 million yuan in three years.　　On the day of the month, the National Energy Administration released monthly data on electricity consumption in the whole society: monthly electricity consumption in the whole society was 100 million kWh, a year-on-year increase of .%; for the month, the total social electricity consumption was 100 million kWh, a year-on-year increase of .%. China International Finance Research reported that the monthly electricity consumption growth rate slightly exceeded its expected %, especially the light industry electricity consumption growth rate in the month increased by .% year-on-year, driving industrial power consumption by .% year-on-year.　　 The reason why the market pays attention to the electric power sector is that, in addition to the fact that the sector has “latent” no performance all the year round, it is also because it has three major characteristics. First, the overall stock price of the power sector is low, and the stock price is generally below the yuan; second, the valuation of the sector is at a historically low level. The current A-share power stock price corresponds to a historically low annual price-book ratio, and the valuation has reflected investors’ Concerns about the risk of deteriorating earnings, the downside risk of the stock price is limited; after *, due to the characteristics of the industry, the profitability of the power sector is less volatile, the periodicity is not obvious, and the performance flexibility of the sector is also poor. But from another perspective, this sector also has a strong margin of safety.