CITIC Securities: It is recommended to allocate leading hydropower, coal-electric integration, H-share green electricity and nuclear power stocks, whose valuation has already fully reflected industry risks.

Citic Securities research report states that in the first half of 2026, the overall fundamentals of the industry are weak, with coal prices rising on the cost side, comprehensive on-grid electricity prices falling on the revenue side, and industry-level overcapacity continuing to suppress the industry. In terms of power sources, we expect that only hydropower with abundant water supply and stable electricity prices will perform well in the interim report, while non-hydropower sources such as thermal power, wind power, and nuclear power are expected to report generally poor performance. In a weak fundamental environment, high certainty and valuation are key criteria for selecting targets. We recommend investing in leading hydropower companies, coal-fired power generation, and H-share green power and nuclear power companies where valuation risks have been fully released by the industry.