China Renewables & Utilities Sector Weekly #96: Headwinds vs. yields

Power Utilities – weaker demand: The August power output data released this week was lacklustre. China's power output declined 0.8% YoY in August 2026, following a modest 0.1% decline in July, marking two consecutive months of contraction for the first time since the Jan-Feb 2025 period. Although the power demand breakdown has yet to be released, we believe softer activity in energy-intensive industries likely contributed to the weakness in August, with DB China Economics team noting growth in non-metallic minerals and non-ferrous metals slowed. This contrasts with July, when a 5% decline in residential consumption amid cooler weather than last summer was a major contributor to the slowdown in power demand. By fuel type, the decline in thermal power output widened to 4.3% YoY in August from 3.5% in July, while hydropower output growth slowed to 2.8% from 6.7%. Our hydropower output tracker for China Yangtze Power (600900.SS) also indicates softer YoY output since late August, with the