After the adjustment of coal prices, the reduction of power generation costs, and the fact that power companies were allowed to raise electricity prices, the A-share power sector is all red today.
As of the close of trading on October 20, the power sector index rose more than 3%, and the sector stocks rose almost across the board.
(Source: Snowball)
In today's power sector, 13 non-ST stocks such as Huadian Energy, Huadian International, and Guodian Power have risen and fallen.
So behind the collective collapse of individual stocks in the power sector, what is the reason that has stimulated the overall strengthening of the thermal power sector, and has also led to a sharp decline in the coal sector today?
<h1 class="pgc-h-arrow-right" data-track="13" thermal power generation accounts for 70% > of domestic power generation, and coal prices fall and power generation costs fall</h1>
Many investors may not be clear that more than 70% of the domestic power generation industry is basically thermal power generation. In this case, the volatility of coal prices is crucial.
It is worth mentioning that the domestic coal price is "on the market", followed by the international coal market price fluctuations. On the other hand, in order to take care of the electricity consumption of enterprises and residents, the domestic electricity price has always been price-limited.
In this context, with the rapid rise in coal prices this year, for thermal power generation enterprises, the more power generation, the greater the loss.
With the release of the "carbon neutrality" policy, after the restriction of domestic coal power generation, coupled with the inability of overseas coal to enter, the price of coal has been pushed higher, and led to regulation at the relevant policy level yesterday evening.
(Source: official website of the National Development and Reform Commission)
Yesterday, the recent surge in thermal coal, because of regulatory reasons, the price of thermal coal in various periods of the evening fell collectively.
(Performance of thermal coal futures on the evening of October 19)
Affected by the above regulation, after the price of coal futures plummeted yesterday, there has also been a large decline in the listed companies in the coal sector today.
As of the close of trading on October 20, the coal sector as a whole fell by 6.62%, and most stocks in the coal sector fell.
(Source: Oriental Fortune Network)
As of today's close, 26 shares in the coal sector fell by more than 5%, and 9 individual stocks such as China Coal Energy, Orchid Science and Technology Innovation, and Shanmei International fell to a halt.
<h1 class="pgc-h-arrow-right" data-track="23" > In addition to the decline in coal prices is good for power generation enterprises, the market-oriented reform of electricity prices is also good for the industry</h1>
As early as before the regulation of coal prices, at the level of policy regulation, market-oriented reform of electricity prices has been on the road.
According to the research report "Coal Power Feed-in Tariff Market-oriented Reform Boots Landing" released by Huajin Securities on October 12, this market-oriented power reform proposes four major measures in accordance with the requirements of the power system reform of "controlling the middle and opening up the two ends":
1) Liberalize the power supply end: In 2020, China's coal power market will account for about 70% of the total coal power generation, and in the future, it is necessary to orderly release the feed-in tariff of all coal-fired power generation and promote the entry and trading of all coal-fired power.
2) Market-oriented electricity price formation mechanism: expand the range of floating up and down the market transaction electricity price, adjust the floating range from -15% to 10% to ±20%, and the electricity price of high-energy-consuming industries is not subject to this restriction, and the spot price of electricity is not subject to this restriction。
3) Liberalize the use of electricity: promote all industrial and commercial users to enter the market, and cancel the sales price of industrial and commercial catalogs.
4) Protect people's livelihood: maintain cross-subsidies for electricity prices, and maintain the stability of electricity prices for residents, agriculture, and public welfare undertakings.
(Source: Joaquin Securities Research Report)
At that time, the above-mentioned research report mentioned that the continuous high price of coal may suppress the current performance of thermal power companies.
With the policy regulating coal prices on the evening of October 19, the unfavorable factors that suppressed thermal power generation companies were also eliminated.
<h1 class="pgc-h-arrow-right" data-track="39" > two major favorable support power generation enterprises Thermal power generation enterprises in the northern region have limited benefits</h1>
Judging from the current latest situation, thermal power generation enterprises, both in terms of cost and power generation prices, have ushered in good news, that is, coal prices have been depressed and electricity prices have been allowed to rise at the same time.
Although the rise in electricity prices is not a good thing for manufacturing and consumers, it is good news for thermal power generation companies.
As the weather in the north begins to cool, after heating and power supply are carried out at the same time, for the power companies in the north, such as regional leading power companies such as Inner Mongolia Huadian; or the national power companies with layout in the north, such as Guodian Power, etc., the profit performance in the fourth quarter of this year is further optimistic, which is already a high probability.
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