According to the Zhitong Finance APP, China Galaxy Securities released a research report stating that due to the decline in the rush to install after the &#34;530 policy&#34; node, the newly installed capacity of wind and solar energy in July has decreased. According to government policies and relevant institutions' calculations, it is expected that there is still significant growth potential for new energy installations in the future, and the structure of power generation installations in China will continue to become cleaner. It is recommended to seize the turning point opportunities in the sector, with a focus on leading national enterprises such as CHINA LONGYUAN (001289.SZ) and CTGR (600905.SH).
<h2>The main points of China Galaxy Securities are as follows:</h2>
Newly installed capacity of wind and solar continues to decline in July, with significant long-term growth potential.
In July, the newly installed capacity of wind and solar energy was 2.28GW and 11.04GW, respectively, with year-on-year growth rates of -44.0% and -47.6%, and month-on-month growth rates of -55.4% and -23.2%. The decline in installed capacity is mainly due to the impact of the decline in the rush to install after the &#34;530 policy&#34; node. By the end of July, the cumulative installed capacity of wind and solar energy was 574.87GW and 1109.60GW, respectively, with year-on-year growth of 22.1% and 50.8%, accounting for 15.6% and 30.2% of the total installed capacity. Looking ahead to the whole year, the State Grid Energy Research Institute predicts that the newly installed capacity of new energy nationwide will be 430-500 million kilowatts by 2025. Based on this, it is estimated that there is still a growth space of 153-223GW for new energy installations from August to December. In the long term, according to the National Development and Reform Commission and the National Energy Administration's &#34;Implementation Plan for the Optimization of Power System Regulation Capacity (2025-2027)&#34; published in December 2024, by 2027, the power system regulation capacity will be significantly enhanced, supporting an average annual new installation of over 200GW of new energy from 2025 to 2027. It is expected that there will still be significant growth potential for new energy installations in the future, and the structure of power generation installations in China will continue to become cleaner.
The growth rate of thermal power generation accelerated in July, while the decline in hydropower generation expanded.
In July, the industrial power generation of large-scale enterprises was 926.7 billion kilowatt-hours, a year-on-year increase of 3.1%, with a growth rate that accelerated by 1.4 percentage points compared to June. In July, the growth rates of thermal power, wind power, and solar power generation accelerated, while the decline in hydropower expanded, and the growth rate of nuclear power slowed down. The year-on-year growth rates for thermal/hydropower/nuclear/wind/solar power generation in July were +4.3%/-9.8%/+8.3%/+5.5%/+28.7%, with changes in growth rates compared to June of +3.2 percentage points/-5.8 percentage points/-2.0 percentage points/+2.3 percentage points/+10.4 percentage points.
The growth rate of electricity consumption accelerated in July, with monthly electricity consumption breaking 1 trillion kilowatt-hours for the first time.
In July, the total electricity consumption of society was 1022.6 billion kilowatt-hours, setting a new monthly record and breaking 1 trillion kilowatt-hours for the first time, with a year-on-year increase of 8.6%, and an acceleration of 3.2 percentage points compared to June. Among them, the electricity consumption for primary/secondary/tertiary industries and residential life was 17 billion/593.6 billion/208.1 billion/203.9 billion kilowatt-hours, with year-on-year growth of 20.2%/4.7%/10.7%/18.0%, and changes compared to June of +15.3 percentage points/+1.5 percentage points/+1.7 percentage points/+7.2 percentage points. In July, the electricity consumption for the tertiary industry and residential life continued to grow rapidly. Driven by the rapid development of mobile internet, big data, and cloud computing, the electricity consumption of the information transmission, software, and information technology service industry in July increased by 18.9% year-on-year
In July, many regions across the country experienced multiple rounds of high temperatures, with the national average temperature reaching a historical high for the same period since 1961, driving a year-on-year increase of 18.0% in urban and rural residents' electricity consumption for the month.
Investment Suggestions
① Green Electricity: The energy consumption target assessment in the final year of the 14th Five-Year Plan is expected to catalyze the demand for green electricity. At the same time, after the establishment of a sustainable pricing settlement mechanism for new energy, the future revenue expectations for the industry will be clearer. It is recommended to seize the turning point opportunities in the sector, with a focus on leading national enterprises such as CHINA LONGYUAN and CTGR.
② Thermal Power: With the peak season ending and coal shipments recovering, coal prices are expected to re-enter a downward channel. It is recommended to pay attention to companies with large market coal exposure and those in regions with relatively small reductions in the 2025 annual long-term contract electricity prices. Individual stocks to watch include Datang International Power Generation and Jiantou Energy.
③ Hydropower and Nuclear Power: In a declining interest rate cycle, hydropower and nuclear power, which have strong dividend attributes, possess long-term allocation value. Additionally, nuclear power has high long-term growth potential. Individual stocks to focus on include Yangtze Power and China National Nuclear Power.
Risk Warning: Risks of installed capacity not meeting expectations; risks of significant increases in coal prices; risks of reductions in on-grid electricity prices; risks of intensified industry competition, etc

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China Galaxy Securities released a research report indicating that due to the "530 policy," the newly installed capacity for wind and solar power in July declined, reaching 2.28GW and 11.04GW respectively, with year-on-year growth rates of -44.0% and -47.6%. Although there is a decline in installed capacity in the short term, it is expected that there will still be significant growth potential for new energy installations in the future. It is recommended to pay attention to leading companies such as CHINA LONGYUAN and CTGR. Looking ahead to 2025, it is expected that the newly installed capacity for new energy nationwide will reach 430-500 million kilowatts

China Galaxy Securities: The installation of new wind power continues to decline, suggesting to seize the turning point opportunities in the sector