China's 15-FYP carbon-peaking policy and 2Q26 power producer updates jointly reinforce a positive view on the utilities/renewables segment

Overview

This report is J.P.Morgan's event commentary on China’s utilities and renewable energy segment, focusing on China’s 15-FYP Carbon Peaking Action Plan, the NEA 2026-2028 energy-saving and carbon-reduction plan, and the latest operating updates for CGN Power, Yangtze Power, and Qingdao TGOOD Electric. The report views the policy goals as broadly consistent with the existing direction but with a clearer execution path, supporting expansion of non-fossil energy, higher grid flexibility, reduced oil dependence, and electrification in sectors such as industry and transportation, with a positive impact on grid equipment, renewable energy equipment, and renewable energy operators.

Core views

Key views include: first, policy aims of a 17% reduction in CO2 emissions per unit of GDP by 2030 versus 2025 and a 25% non-fossil energy share by 2030 support expansion of wind, solar, hydro, and nuclear power, grid flexibility investments including storage, UHV, and demand response, and expansion of carbon-market and green-certificate mechanisms. Second, CGN Power’s 2Q26 nuclear generation grew 3.5% year over year, and with potential tariff-mechanism improvements, upside to profitability looks increasingly constructive. Third, Yangtze Power’s 2Q26 hydropower generation rose 2.8% year over year, and with its defensive business model, low leverage, strong cash flow, and clear dividend commitment, it remains a favored name in the rate-cut cycle. Fourth, TGOOD Electric benefits from China data center orders, overseas utility orders, prefabricated substation demand in the Middle East, and AIDC product traction.

Analysis framework

The report combines policy interpretation with company operational updates: first mapping the objectives, implementation measures, and industry beneficiaries of the 15-FYP carbon-peaking action plan and NEA’s three-year energy-saving and carbon-reduction plan, then combining CGN Power and Yangtze Power 2Q26 generation data with TGOOD Electric management-call signals to form sector and stock preferences.

Methodology notes

• Policy-driven industry researchCarbon peak and non-fossil energy target assessment

  Assesses sector impact by linking policy targets and implementation measures to the beneficiary industrial chain.

  The report maps policy indicators such as 2030 carbon intensity decline, non-fossil energy share, efficient coal power upgrades, and green certificates/carbon markets to renewable energy, grid equipment, storage, demand response, and electrification demand.

• Company operating update analysisGeneration year-over-year and capacity-contribution analysis

  Evaluates power operator earnings momentum using quarterly generation, unit commissioning, and power tariff outlook.

  The CGN Power analysis focuses on nuclear generation and unit contributions from Daya Bay, Lingdong, Ningde, Huizhou, Cangnan, and Taishan. The Yangtze Power analysis focuses on generation changes at Three Gorges, Gezhouba, Xiluodu, Xiangjiaba, Wudongde, and Baihetan.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• CGN Power (1816.HK)

  Nuclear operator benefiting from non-fossil energy expansion and potential tariff-mechanism improvements

  Strengths

  2Q26 nuclear generation was 58,640 GWh, up 3.5% year over year; commercial start-ups at Huizhou and Cangnan added incremental output; J.P.Morgan maintains OW.

  Weaknesses

  Declines at Taishan partially offset overall growth.

  Comparison

  Compared with peer power operators, nuclear power benefits more directly from non-fossil energy expansion policies.

  Risks

  Tariff-mechanism improvements may fall short of expectations, unit utilization could weaken, or output at some stations may fluctuate.

• Yangtze Power-A (600900.SS)

  Hydropower operator, shown as a defensive favorite in the report

  Strengths

  2Q26 hydropower generation reached 70.9bn kWh, up 2.8% year over year; the business model is highly defensive, with low leverage, strong cash flow, and clear dividend intent.

  Weaknesses

  Lower output at Xiluodu, Xiangjiaba, Wudongde, and Baihetan partly offset growth.

  Comparison

  In China’s rate-cut cycle, higher cash-flow stability and dividend traits make it relatively more defensive.

  Risks

  Hydrology volatility, lower plant output, and changes in rate and dividend expectations.

• Qingdao TGOOD Electric (300001.SZ)

  Power equipment and data center power supply name

  Strengths

  China data center orders YTD are already above FY25 levels, and management guided double-digit growth (roughly doubling) in China DC orders this year; Middle East prefabricated substation orders could exceed double-digit growth with around 50% market-share guidance; partnership with Eaton supports overseas expansion; high-voltage AC-to-low-voltage DC solutions are receiving RFQs from cross-region data center customers.

  Weaknesses

  The stock has outperformed the index by roughly 20 percentage points YTD, meaning some expectations may already be partly reflected.

  Comparison

  Compared with traditional power equipment peers, it has a more pronounced exposure to data center powering and overseas prefabricated substations.

  Risks

  Data center order realization below expectations, delivery risk on overseas orders, slower partnership execution, and valuation de-rating.

• Orient Cables, Goldwind-H, Deye, Sungrow, Wasion Holdings

  Renewable and power equipment beneficiary set

  Strengths

  Policy is driving expansion of wind, solar, hydro, and nuclear, grid flexibility, storage, and electrification demand; J.P.Morgan explicitly prefers these equipment manufacturers.

  Weaknesses

  The report does not provide detailed forecasts or target prices for each company.

  Comparison

  Compared with pure operators, these names are more sensitive to capex cycles and equipment order books.

  Risks

  Policy execution pace, rising competition, price compression, order visibility, and margin volatility.

Key data

• 15-FYP carbon-peaking targetBy 2030, CO2 emissions per unit of GDP are to fall 17% from 2025 levels; non-fossil energy is to reach 25%From the July 9, 2026 release of the 15th Five-Year Plan (2026-2030) Carbon Peaking Action Plan.
• NEA 2026-2028 targetBy 2028, non-fossil energy share is expected to increase about 1 percentage point per year; efficient coal capacity share is expected to rise about 15 percentage pointsFrom the Energy Sector Energy-Saving and Carbon-Reduction Action Plan released on July 10, 2026.
• CGN Power 2Q26 nuclear generation58,640 GWh, up 3.5% year over yearGrowth is driven by increases at Daya Bay, Lingdong, Ningde and by commercial start-ups at Huizhou and Cangnan; Taishan declines partly offset that.
• Yangtze Power 2Q26 hydropower generation70.9bn kWh, up 2.8% year over yearThree Gorges and Gezhouba generation gains were partly offset by declines at Xiluodu, Xiangjiaba, Wudongde, and Baihetan.
• Qingdao TGOOD Electric stock performanceTGOOD is up 21% year-to-date, outperforming SZCOMP by about 20 percentage points with SZCOMP up 1.5%The report says investors are gradually recognizing the upside from overseas prefabricated substation and data center growth.
• Qingdao TGOOD Electric valuationBelow 20x forward 1-year P/EJ.P.Morgan says valuation remains attractive and reiterates OW.

Impact & implications

From a policy perspective, the carbon-peaking and energy-saving/ carbon-reduction plans strengthen medium-term demand for non-fossil energy, grid flexibility, storage, UHV, demand response, green power and green-certificate markets, and end-use electrification, with positive implications for equipment chains including Orient Cables, Goldwind-H, Deye, Sungrow, Wasion Holdings, and TGOOD Electric. At the company level, CGN Power’s output additions and potential tariff improvements could lift earnings; Yangtze Power has defensive characteristics in the rate-cut cycle; and TGOOD Electric’s data center and overseas order book could support growth and a valuation re-rate.

Risks

• Although policy goals are clear, execution pace, local implementation intensity, and supporting mechanisms may affect how quickly orders and earnings convert.
• CGN Power and Yangtze Power generation is affected by unit operations, hydrology conditions, and output fluctuations at individual plants.
• There is uncertainty around whether CGN Power’s 2026/27 tariff mechanism will improve as expected.
• If TGOOD Electric’s data center and overseas order growth falls short of management guidance, the investment case could weaken.
• Equipment manufacturers face competition, pricing pressure, raw material costs, and overseas delivery risk.
• The views, ratings, and valuations in the report are based on mid-July 2026 information and may change with market and company disclosures.

What to watch

• Local implementation rules for the 15-FYP carbon-peaking plan, expansion of green certificates/carbon markets, and progress on power tariff reform.
• Annual execution in the NEA 2026-2028 plan of non-fossil energy share, efficient coal upgrades, storage, and grid flexibility projects.
• CGN Power’s 2026/27 tariff mechanism, contributions from new units such as Huizhou and Cangnan, and whether Taishan generation recovers.
• Yangtze Power’s major hydropower station inflows, generation, cash flow, and dividend delivery.
• Qingdao TGOOD Electric’s China data center orders, Middle East prefabricated substation orders, overseas utility customers, and AIDC commercialization progress.
• Order book, margins, and policy-capture execution at Orient Cables, Goldwind-H, Deye, Sungrow, and Wasion Holdings.