Guangfa Securities: Power Generation Increases, Energy Storage at High Level, Focus on Hydropower Production and Securitization.

Guangfa Securities released a research report stating that overall, the water supply in the Yangtze River and Pearl River basins was good in the fourth quarter and throughout the year, with electricity generation increasing as expected. However, the water supply in the Yalong River and Dadu River basins was average. Due to insufficient water storage during the flood season, the Yalong River continued to store water at the same level as the same period last year in November. It is estimated that the total energy storage capacity of the three major hydropower stations on the Yalong River is 251.80 billion kilowatt-hours, which is basically the same as the previous year, and the impact of low water levels has been eliminated. In the past two years, hydropower has entered a new round of peak production, and with the extension of the low interest rate environment, the decline in long-term interest rates will dilute the cost of funds, and valuation is expected to rise. It is recommended to pay attention to hydropower projects with high growth in electricity consumption and high energy storage levels in the short term.