Huatai Securities: El Niño May Lift Hydropower Output; Yalong River Generation Could Turn Positive in Main Flood Season

A Huatai Securities research note said China Southern Power Grid’s load hit a record high ahead of schedule by late May 2026, boosting market attention on extreme weather and hydropower inflows, according to 36Kr. Based on official agencies’ rainfall forecasts for main flood seasons across different regions in China and a review of how past El Niño/La Niña events affected hydropower generation during main flood seasons, the report said El Niño does not necessarily imply drier inflows that year and that hydropower generation overall tends to benefit from El Niño events. It also said that since Q2 2026, Yalong River hydropower—where high-frequency reservoir outflow data has been weak—could see year-on-year generation growth turn positive during the main flood season. Huatai added that hydropower assets currently offer attractive allocation value, with valuations at historically low levels and relatively high projected 2026 dividend yields.