The recent shift in market sentiment concerning the Chinese tech sector has sparked a major re-evaluation of technological assets within the country, leading to a surge of enthusiasm in the A-share marketThe mood among investors has become markedly more optimistic as they display renewed risk appetite, driving primary stock indices upwards throughout last weekThis substantial shift indicates a broader trend as analysts look ahead, acknowledging the overarching excitement regarding the spring market, yet they express varying opinions on asset performance moving forward.

For instance, institutions such as CITIC Securities have highlighted that sentiment indicators related to the tech sector have reached historical peaksThey suggest that investor enthusiasm is nearing its zenith, forecasting potential pressure for market corrections in the coming weeks as the emotional impetus expands and begins to waneThis outlook leans toward a repositioning of focus towards core assets that might now be poised for recoveryLogically, any discussion surrounding core assets inevitably leads to one sector in particular: public utilities.

Public utilities are classified as industries that provide essential services to the publicAccording to the Shenwan Industry Classification, the sector encompasses a variety of sub-industries, including gas, thermal power generation, heating services, integrated electric services, solar energy, wind energy, hydroelectric power, nuclear power generation, and other forms of energy productionThis diverse umbrella covers a critical component of the economy, aiming to meet society's basic needs for energy and resources.

At the heart of the public utility sector lies the distinguishing characteristic of natural monopolies, bolstered by policy supportEnterprises in this arena, such as providers of electricity, water, and gas, require substantial fixed asset investments, which often translate into significant economies of scaleThe nature of public utilities allows them to establish stable customer bases and steady demand within their service regions, ensuring uninterrupted cash flow

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More importantly, as a backbone of social and economic infrastructure, the public utility sector offers a level of demand stability that augments its appeal as a core investment.

Recently, provinces across China have rolled out their work reports outlining governmental plans for 2025. Places like Guangdong, Zhejiang, Liaoning, Shandong, Fujian, and Guangxi have explicitly outlined targets for nuclear power plant construction, with commitments to maintain momentum in developing nuclear energy projects into the next few yearsConcurrently, various municipalities have announced comprehensive management guidelines and proposed plans for renewable energy, including wind and solar projects due by the end of the same timeframe—highlighting a unified national effort towards sustainable energy transition.

In this context, the public utility sector continues to uphold the stability of national energy security, ensuring orderly production and livelihood within societyFurthermore, the push for a low-carbon ecological transformation is crucial, encouraging improvements in environmental sustainabilityGovernmental policy at both central and local levels aims to reinforce traditional energy's stabilizing role while facilitating long-term developments in environmental protection initiatives.

Adding to this narrative, recent reforms introduced in China's “Nine National Measures” last April emphasized enhanced assessment and oversight of publicly-listed companiesThese reforms target greater quality among listed firms and increased regulation of institutional behaviors, especially in the realm of private equity and quantitative tradingThis uptick in strict regulatory frameworks has rendered state-owned enterprises and high-dividend core assets highly sought after by investors navigating the market landscape.

The public utility sector is typically recognized as a prime candidate for dividend growth investment, with particularly strong investment appeal

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NOTABLY, Huaxi Securities has identified robust investment potential within the hydroelectric, nuclear, and gas subsectors by employing a set of analytical frameworks, known as the “Five Elements of Central Estimates.”

Firstly, hydroelectric power—considered the "anchor" of dividend value—primarily derives profitability from its usage hours and electricity price levelsWater resources display solid gross margins, excellent cash flows, and stable costsAt a development stage, hydroelectric capacity is entering a moderate growth era, while high-quality projects near completion signal scarce asset availabilitySustainability is a particularly prominent feature for hydroelectric assets, which maintain long operational lifespans and possess strong capabilities for accumulating free cash flowNoteworthy is the growing willingness among publicly listed hydroelectric firms, such as China Yangtze Power, to enhance dividend allocations following a trend of increasing payout rates since 2005.

Secondly, nuclear power presents a compelling blend of stability and long-term growth potentialThe driving force behind profitability in this sector largely stems from expanding installed capacity, with electricity tariffs exhibiting less fluctuation influenceThe industry is shifting into a growth phase, with expectations of adding 10GW of capacity annually until 2030. Nuclear power's development involves high capital demands, reinforcing its scarcity alongside challenges for permitting, construction, and fundingSimilar to hydroelectric power, nuclear assets demonstrate strong sustainability profiles and cost-reduction trends, ultimately promising potential for future dividends and enhanced investor valuationsFor instance, China National Nuclear Corporation has consistently delivered dividend levels exceeding 35%, managing to maintain some degree of shareholder returns even as capital expenditures rise sharply.

Lastly, gas utility companies may be underappreciated in their dividend yields, drawing attention to their core operations focused on connection, sales, and ancillary services

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