The research department of East Asia Securities published a research report indicating that there will be significant opportunities for electricity reform in mainland China. It is expected that more related reform content will be announced at the Third Plenary Session to be held in July. It is believed that the focus of electricity reform will be on promoting the construction of new energy electric grid projects and increasing the proportion of new energy generation. East Asia Securities is optimistic about new energy generation companies in wind, solar, and nuclear energy, as well as suppliers of power generation equipment benefiting from increased demand for replacing old power generation equipment. As for the upstream industries of new energy such as polysilicon and photovoltaic glass, they are still affected by overcapacity and price wars, therefore the fundamentals are expected to be difficult to improve in the short term. The report points out that the National Energy Administration recently issued a notice on ensuring the high-quality development of new energy by guaranteeing the consumption of new energy. In the notice, it is mentioned that in areas with good resource conditions, the utilization rate of new energy can be appropriately relaxed, with a target of not less than 90%. Previously, the utilization rate for solar and wind energy was not less than 95%. East Asia Securities expects that with the relaxation of the "consumption red line" from 95% to 90%, that is, the upper limit of wind and solar curtailment rate will be increased from 5% to 10%, more new energy installation projects are expected to be approved in the future, which will benefit the wind power and photovoltaic companies in terms of their newly installed capacity. The report also pointed out that in terms of electricity prices, as the mainland has implemented a coal power capacity pricing mechanism earlier this year, it is anticipated that reform in electricity prices for new energy will also occur. East Asia Securities predicts that the authorities will optimize the profit model of electricity companies, increase the income of new energy generation companies through a more comprehensive environmental premium mechanism. With the further development of artificial intelligence, East Asia Securities believes that the number and power consumption of data centers and AI applications will continue to increase, leading to a higher demand for new energy generation solutions. While direct benefits to wind and solar energy generation may not be immediate, they are expected to indirectly benefit from the overall increase in electricity demand.