Analysis of Wanneng Power's Potential for Davis Double Play and Investment Logic Reshaping

A social media post [1] analogizes the trend of the non-ferrous metals sector (“price first, logic later”) to the power sector, believing that Wanneng Power (000543) has performance certainty and growth elasticity, and is expected to benefit from the bottoming-out reversal of electricity prices and the scarce track of UHV external transmission of green power, achieving a Davis Double Play of profit and valuation.

1. Valuation Depression Verification
   : Wanneng Power’s current PE is 8.27x, lower than peers China Power (11.15x) and CGN Power (14.33x) [0], indicating it is in a valuation depression.
2. Stable Base Support
   : The company benefits from stable electricity demand in Anhui Province, providing a guarantee for performance certainty [1].
3. Flexible Operation Advantage of Thermal Power
   : The flexible operation mode of thermal power (“generate electricity when profitable, shut down when losing money”) helps control costs and respond to market demand [1].

1. Scarcity of UHV Track
   : Investment in China’s UHV network continues to grow, with a CAGR of 9.2% for transmission investment from 2025 to 2030 [0]; State Grid’s 2025 budget exceeds 650 billion yuan, and transmission expenditure increased by 19% from January to November 2024 [0], providing policy and financial support for the UHV track.
2. Electricity Price Bottoming Signal
   : Post [1] points out that the signal of electricity price bottoming is clear, but this conclusion has not been verified by clear data and needs further observation.

1. Reference Value of Sector Logic Analogy
   : Analogizing the power sector to the non-ferrous metals sector’s “price first, logic later” trend suggests that the power sector may have similar valuation repair opportunities [1].
2. Long-term Value of UHV Track
   : As a scarce track, UHV will provide growth elasticity for Wanneng Power’s green power external transmission business and reshape its investment logic [1][0].
3. Potential Space for Valuation Repair
   : The current valuation depression provides potential room for improvement on the valuation side for the Davis Double Play [0].

1. Unverified Bottoming-out Reversal of Electricity Prices
   : The conclusion of electricity price bottoming proposed in the post lacks clear data support; attention should be paid to subsequent electricity price policies and market supply-demand changes [1].
2. Unclear Contribution of UHV Projects
   : The specific progress and profit contribution of Wanneng Power’s UHV projects have not been disclosed in detail [1].
3. Industry Policy Risks
   : The power industry is greatly affected by policies; attention should be paid to future changes in electricity price, environmental protection and other policies [0].

1. Accelerated UHV Investment
   : State Grid has significantly increased UHV investment, providing opportunities for the development of the company’s related businesses [0].
2. Valuation Repair Potential
   : The current valuation depression provides room for the company’s valuation improvement [0].
3. Flexible Operation Advantage of Thermal Power
   : The flexible operation mode of thermal power helps the company maintain stable performance amid market fluctuations [1].

Wanneng Power has performance certainty and growth elasticity, and is currently in a valuation depression. Policy and investment support for the UHV track provide growth momentum for it. The stock price has performed strongly recently, indicating market recognition of its investment logic. However, the bottoming-out reversal of electricity prices has not been fully verified, and the specific contribution of UHV projects remains to be clarified; continuous attention should be paid to relevant progress. Investors should make decisions based on their own risk preferences and investment horizons, referring to multiple factors such as the company’s fundamentals, industry policies and market sentiment.