Analysis of Investment Opportunities in the Power Sector and Wanneng Power Against the Backdrop of Electricity Price Bottoming

Comprehensive Analysis

Logic of Fundamental Improvement and Valuation Repair in the Power Sector

The signal of electricity price bottoming has been verified: The平仓 price of Q5500 thermal coal at Qinhuangdao Port dropped to 780 yuan/ton (a year-on-year decrease of 170 yuan/ton), combined with the implementation of the capacity electricity price mechanism (fixed cost recovery ratio will not be less than 50% from 2026), the profit model of thermal power tends to be stable [0][1]. The current PE of the power sector is 17.11x, while Wanneng Power’s PE is only 8.27x, far below the industry average, showing an obvious valuation mismatch [0][2].
Core Advantages and Actual Planning of Wanneng Power

As a leading power company in Anhui Province, Wanneng Power’s layout in the UHV green power transmission track (participating in the Shaanxi Power Integration Company entering Anhui, and closely following the “Inner Mongolia Power to Anhui” channel) has been verified [1][0]. By the end of its “15th Five-Year Plan”, the company plans to hold more than 15 million kW of thermal power installed capacity and more than 10 million kW of new energy installed capacity, with the proportion of new energy being about 40% (not the 50% expected by the market) [1]. Although the new energy proportion target is lower than market expectations, the “dual-drive” strategy still gives it growth flexibility.
Market Performance and Sentiment

Wanneng Power’s stock price has performed strongly recently: +6.48% in 5 days, +11.95% in 1 month, +22.85% in 3 months [0]. The market is generally bullish on the power sector, believing that its valuation is at a historical low (PE quantile 29.4%), and combined with fundamental improvements, it has strong repair momentum; it is optimistic about Wanneng Power’s low valuation, dual-drive strategy, and UHV layout, and expects valuation repair [0][1].

Key Insights

The core logic of the power sector’s valuation repair is the dual effect of fundamental improvement (falling coal prices, implementation of capacity electricity prices) and valuation depression, rather than a single factor driving it.
Wanneng Power’s UHV green power transmission layout gives it scarcity in the green power track, but attention should be paid to the impact of the difference between actual planning and market expectations on sentiment.
The realization of the Davis Double Play depends on multiple factors such as the pace of new energy project implementation and electricity price changes, which is uncertain.

Risks and Opportunities

Opportunities
: The power sector has large room for valuation repair; Wanneng Power’s “dual-drive” strategy has both performance certainty and growth flexibility; the UHV green power transmission layout provides new impetus for its future growth.
Risks
: Wanneng Power’s new energy installed capacity proportion target is lower than market expectations, which may affect market sentiment; the specific contribution of UHV green power transmission to the company’s profits has not been clearly disclosed; the realization of the Davis Double Play depends on multiple uncertain factors.

Key Information Summary

The power sector has investment potential due to electricity price bottoming and valuation depression.
As a leading power company in Anhui Province, Wanneng Power (000543.SZ) has performance certainty and growth flexibility through its dual-drive strategy of “thermal power + new energy” and its layout of UHV green power transmission.
Wanneng Power’s current PE is 8.27x, far below the industry average, and its valuation is undervalued.
It should be noted that the actual target for the proportion of new energy installed capacity in Wanneng Power’s “15th Five-Year Plan” is about 40% (not 50%), and the realization of the Davis Double Play is uncertain.

Analysis of Investment Opportunities in the Power Sector and Wanneng Power Against the Backdrop of Electricity Price Bottoming

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