Comparative Analysis of Investment Value Between Thermal Power Stocks and Bank Stocks

Investors compare the investment value of thermal power stocks (represented by Huaneng Power International) and bank stocks (represented by Agricultural Bank of China and China Merchants Bank), focusing on four core dimensions: asset quality, profitability, dividend policy, and growth:

1. Asset Quality
   : Bank stocks’ assets are mainly loans, facing credit risk and bad debt provision pressure [4,6]; thermal power stocks’ assets are power generation equipment, facing environmental protection transformation and technology obsolescence risks. However, the actual service life of thermal power units (30-40 years) is longer than the accounting depreciation period (20-30 years), which may lead to undervalued net assets [2,3].
2. Profitability
   : Bank stocks generally have high ROE (China Merchants Bank about 15-20%, Agricultural Bank of China about 10%) [4,6], while thermal power stocks’ ROE is affected by coal price and electricity price fluctuations, only about 5-10% [5].
3. Dividend Policy
   : Bank stocks have stable and high dividend yields (Agricultural Bank of China about 5%) [6], while thermal power stocks’ dividend yields are greatly affected by profit fluctuations [5].
4. Growth
   : Bank stocks rely on credit expansion and economic growth, with limited growth; thermal power stocks face new energy substitution, and long-term growth is limited [0].

• The core logic behind the low PB ratio of thermal power stocks (e.g., Huaneng Power International H-share 0.6) comes from the mismatch between accounting depreciation policies and actual asset service life, which may be an important reason for undervalued net assets [1,2,3].
• The stability and high dividends of bank stocks are their core attractiveness, while the valuation repair potential of thermal power stocks needs to be judged based on depreciation policy adjustments or industry transformation progress [0].

• Thermal Power Stock Risks
  : Tightening environmental protection policies, new energy substitution pressure, coal price fluctuations;
  Opportunities
  : Valuation repair (if depreciation policies are adjusted or the market recognizes actual asset value) [0].
• Bank Stock Risks
  : Credit risk exposure, impact of interest rate liberalization;
  Opportunities
  : Stable dividends and low-volatility returns [0].

This analysis objectively presents the differences between thermal power stocks and bank stocks in terms of asset quality, profitability, dividend policy, and growth. Thermal power stocks have the possibility of undervalued net assets due to depreciation policies and low PB ratios; bank stocks have higher ROE and stable dividends. Investment decisions need to be comprehensively considered based on industry prospects, personal risk preferences, and market environment, avoiding single-dimensional judgments.