Guosheng International released a research report stating that July's social electricity consumption growth rate surged significantly, with tertiary industry electricity consumption and urban-rural residential electricity consumption being the main drivers. The firm believes that July's total social electricity consumption grew substantially, with the cumulative growth rate of power demand continuing to rise. Currently, Hong Kong-listed power operators are generally undervalued, with earnings growth outpacing industry growth rates. Multiple stocks offer dividend yields exceeding or approaching 6%, while declining coal prices provide support for thermal power profitability. The firm recommends investors seize opportunities in undervalued, high-dividend, quality power operators such as CHINA POWER (02380) and Beijing Energy Clean Energy (00579).

Guosheng International's main viewpoints are as follows:

**July Total Social Electricity Consumption Rose 8.6% Year-on-Year, Growth Rate Significantly Improved Month-on-Month**

According to data released by the National Energy Administration, July's total social electricity consumption reached 1,022.6 billion kWh, up 8.6% year-on-year and 17.9% month-on-month, with the year-on-year growth rate increasing by 3.2 percentage points compared to June. From January to July, cumulative total social electricity consumption reached 5,863.3 billion kWh, up 4.5% year-on-year, with the cumulative growth rate continuing to recover.

Breaking down total social electricity consumption by industry, July's primary industry electricity consumption was 17 billion kWh, up 20.2% year-on-year; secondary industry consumption was 593.6 billion kWh, up 4.7%; tertiary industry consumption was 208.1 billion kWh, up 10.7%; and urban-rural residential electricity consumption was 203.9 billion kWh, up 18.0%.

For January-July, primary industry electricity consumption was 84.7 billion kWh, up 10.8%; secondary industry consumption was 3,740.3 billion kWh, up 2.8%; tertiary industry consumption was 1,125.1 billion kWh, up 7.8%; and urban-rural residential electricity consumption was 913.2 billion kWh, up 7.6%.

July's monthly total social electricity consumption grew 8.6% year-on-year, an increase of 3.2 percentage points from June's 5.4% growth rate, with tertiary industry electricity consumption and urban-rural residential electricity consumption being the main drivers of total social electricity consumption growth.

**High-Tech Industries Show High Electricity Consumption Growth, High Temperatures Drive Residential Electricity Consumption Higher**

According to China Electricity Council data, within the secondary industry, January-July high-tech and equipment manufacturing combined electricity consumption grew 4.6% year-on-year, 1.8 percentage points higher than the secondary industry growth rate. New energy vehicle manufacturing electricity consumption continued its high growth at 25.7%.

In the tertiary industry, driven by rapid development of mobile internet, big data, and cloud computing, January-July internet and related services electricity consumption grew 28.2% year-on-year, while wholesale and retail electricity consumption also grew 12% year-on-year. Due to rapid electric vehicle development, charging and battery swapping services electricity consumption grew 42.6% year-on-year.

July's hot weather drove high growth in residential electricity consumption. According to National Climate Center data, July's average temperature was the highest for the same period since 1961, with multiple regions setting new electricity load records. National urban-rural residential electricity consumption grew 18% year-on-year, with some provinces including Henan, Shaanxi, and Anhui seeing residential electricity consumption grow 30% year-on-year.

**July Above-Scale Industrial Power Generation Rose 3.1% Year-on-Year, Growth Rate Up 1.4 Percentage Points Month-on-Month**

According to National Bureau of Statistics data, July above-scale industrial power generation was 926.7 billion kWh, up 3.1% year-on-year, with the growth rate accelerating by 1.4 percentage points from June, and daily average power generation of 29.89 billion kWh. January-July above-scale industrial power generation was 5,470.3 billion kWh, up 1.3% year-on-year, with daily average power generation up 1.8% year-on-year.

By generation type, above-scale industrial thermal, wind, and solar power growth accelerated, hydropower decline expanded, and nuclear power growth slowed. Above-scale industrial thermal power grew 4.3% year-on-year, 3.2 percentage points faster than June; above-scale industrial hydropower fell 9.8%, with the decline expanding by 5.8 percentage points from June; above-scale industrial nuclear power grew 8.3%, slowing by 2.0 percentage points from June; above-scale industrial wind power grew 5.5%, accelerating by 2.3 percentage points from June; above-scale industrial solar power generation grew 28.7%, accelerating by 10.4 percentage points from June.

**Risk Warning:** Social electricity consumption growth slowdown; electricity prices declining beyond expectations; significant coal price volatility.