To Move forward under Heavy Burdens --- 2008 Major Events Review & 2009 Prospect of Electric Power I

To Move forward under Heavy Burdens --- 2008 Major Events Review & 2009 Prospect of Electric Power I
Jan 5, 2009 03:26
CHINASTOCK Points: Join Date: Dec 28, 2008 Status: offline	1. In 2008, operating environment of electric power industry went through huge changes. Coal price moved high to the summit in July and then declined; online power price increased twice and electric power profitability sharply retreated; meanwhile, water resources & hydropower were relatively steady. Demand and supply was changeable; demand fell fast after the electricity shortage in summer; while current electric power demand was over the supply and the generation equipment utilization hour slid acceleratively. However, it is predicted that profitability of the whole industry will return to ascension in 2009. 2. Electric power stocks rallied after poor performance in 2008; with falling coal price, industrial profitability gradually rebounded since late August and electric power index led the market. Water resources & hydropower companies performed well, and leading shares were mostly assets integration concept stocks. Industrial profit inflexion and assets integration are to be the investment main lines in 2009. 3. Maintain "Overweight" rating for the industry, and we suggest attentions be paid to those coal price decline-benefited companies with great cost control and explicit net profit growth for 2009, like Guangzhou Development Industry (600098), GD Power Development Company (600795) and Shenzhen Energy Group (000027) as well as other ones with assets integration concept and explicit growth, such as China Yangtze Power (600900) and Guangxi Guiguan Electric Power (600236).

Jan 5, 2009 03:26

CHINASTOCK
Points:
Join Date: Dec 28, 2008
Status: offline

1. In 2008, operating environment of electric power industry went through huge changes. Coal price moved high to the summit in July and then declined; online power price increased twice and electric power profitability sharply retreated; meanwhile, water resources & hydropower were relatively steady. Demand and supply was changeable; demand fell fast after the electricity shortage in summer; while current electric power demand was over the supply and the generation equipment utilization hour slid acceleratively. However, it is predicted that profitability of the whole industry will return to ascension in 2009.

2. Electric power stocks rallied after poor performance in 2008; with falling coal price, industrial profitability gradually rebounded since late August and electric power index led the market. Water resources & hydropower companies performed well, and leading shares were mostly assets integration concept stocks. Industrial profit inflexion and assets integration are to be the investment main lines in 2009.

3. Maintain "Overweight" rating for the industry, and we suggest attentions be paid to those coal price decline-benefited companies with great cost control and explicit net profit growth for 2009, like Guangzhou Development Industry (600098), GD Power Development Company (600795) and Shenzhen Energy Group (000027) as well as other ones with assets integration concept and explicit growth, such as China Yangtze Power (600900) and Guangxi Guiguan Electric Power (600236).

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