According to a research report from GF Securities, this year's government work report introduced for the first time the implementation of new infrastructure projects, including ultra-large-scale intelligent computing clusters and the integration of computing and electricity. The firm anticipates that similar projects will continue to be launched by 2026. The transformation of green power from exporting electricity to exporting computing power aligns with the logic of China's power sector expanding its global footprint through tokenized computing capacity. Over the next decade, driven by robust demand for computing power and the trend of integrating electricity and computing, power assets centered on green energy are expected to experience a Davis Double, characterized by stable and predictable profitability coupled with long-term growth prospects.

The key viewpoints from GF Securities are outlined below.

**Datang Group's 2.6 GW Green Power Project Wins Bid for Computing-Electricity Synergy; Similar Projects Expected to Follow** Datang Group recently secured the bid for the second phase of the Zhongwei Big Data Computing Power Industrial Green Power Park project in Ningxia. With a total capacity of 2.6 gigawatts, comprising 2 GW of wind power and 0.6 GW of photovoltaic power, this project marks another large-scale implementation of computing-electricity synergy. Previously, Datang's first-phase integrated "source-grid-load-storage" project has already begun supplying power to data centers. That project includes 0.5 GW of photovoltaic and 1.5 GW of wind power. Utilizing a combined model of "physical direct supply" and "virtual direct supply," it offers complementary wind and solar generation with 24/7 supply. This approach meets the round-the-clock power demands of data centers while simultaneously addressing the challenge of integrating new energy sources into the grid. The government work report's first-time mention of such projects this year suggests a sustained rollout of similar initiatives is likely by 2026.

**Western Green Power: Integrated Electricity and Computing with Local Consumption Leads to Multi-Dimensional Improvements** China faces a mismatch in power supply and demand between its eastern and western regions. Currently, transmitting green power from the west to the east not only incurs higher costs due to ultra-high voltage infrastructure and regulation expenses but also carries the risk of grid congestion. Furthermore, it relies heavily on subsequent grid expansion for power delivery. These factors have been central to market pessimism towards green power over the past two years. The computing-electricity synergy model brings fundamental improvements across multiple dimensions. It resolves the issue of integrating wind and solar power, stabilizes the pricing and profitability model, and enhances the environmental value of green energy. From another perspective, the shift from exporting electricity to exporting computing power represents the logical evolution of China's power sector leveraging tokenized computing capacity for international expansion.

**The Era of Computing-Electricity Integration Arrives, Market Momentum Comparable to 2021** The peak period of power investment has concluded, leaving the industry generally lacking large-scale investment avenues. Computing power, as a future-oriented industry, has become a key investment area encouraged by the government. Concurrently, policies mandate that new data centers must source over 80% of their electricity from green sources, making green power an essential component of computing infrastructure development. Over the past decade, major national power companies, traditionally focused on thermal power, have made significant investments in green power, with contributions to profits now often surpassing those from thermal operations. A decade ago, regional power companies, following an explosion in power demand, developed assets in western China that were multiples the size of their original corporate scale. Reflecting on the green power market surge in 2021, which saw sector gains exceed 55% driven by dual-carbon policies and high growth expectations for installed capacity, the next decade looks promising. Supported by strong computing power demand and the integration trend, green power-centric assets are positioned for a Davis Double, offering both stable profitability visibility and anticipated long-term growth.

**Accelerating Utility Transformation: Focus on Annual and Q1 Reports** (1) Thermal Power: Companies with strong performance and high dividends, such as Huaneng Power International, Huadian Power International, China Power International Development, Shenergy Company, Inner Mongolia Dianhua, and Ganneng Co. (2) Hydropower: China Yangtze Power with high earnings growth, and Guiguan Electric Power benefiting from asset injections. (3) Gas: Jovo Energy with its coal-to-gas projects, and Foran Energy catalyzed by green methanol. (4) High-ROE, Low-PB Green Power: H-shares of China Longyuan Power, and Fujian Funeng. (5) Nuclear Power: CGN Power following policy adjustments in Guangdong.

**Risk Warning** Reforms may fall short of expectations; coal prices could rise excessively; the progress of green power capacity installation may be slower than anticipated.