...January 14, 2025 Rising investments: We expect State Grid Corp. of China's (SGCC) total capital expenditure (capex) to have further increased in 2024 and stay high in 2025, from the elevated base of about Chinese renminbi (RMB) 584 billion in 2023. This is primarily driven by heavier investment on ultra-high voltage (UHV) transmission lines, to ensure power supply stability amid rapid increase of renewable energy generation capacities, especially those located in inland renewable energy bases far away from coastal demand centers. Higher capex could moderately dent SGCC's financial ratios. However, the bigger capex could be compensated by higher transmission and distribution (T&D) tariffs in future regulatory periods. This supports the company's financial ratios in the longer term. Slower power demand growth: We expect power demand growth to moderate to 5%-6% in 2025 from 2024's high base of about 7%. We also expect China's power demand to sustain a higher-than-GDP growth in the next three...
