Core view
The energy revolution helps achieve the dual carbon goal. The State Council issued the comprehensive work plan for energy conservation and emission reduction during the 14th five year plan. This work plan focuses on the deployment of ten key projects, involving key industries such as iron and steel, nonferrous metals, building materials, petrochemical, transportation, coal, electric power and heating, and defines the energy conservation and emission reduction targets of key industries during the 14th five year plan, The top-level policy design gradually turns to the plan that can be implemented in each step.
Investment suggestion (electric power): after new year’s day this year, the green power sector continued to callback for two reasons. One is that thermal power enterprises suffered serious losses, especially in the fourth quarter, which exceeded expectations, affecting market sentiment; The second is that at the beginning of the month, the national Standing Committee proposed to put steady growth in a more prominent position. Some investors believe that under the tone of steady growth, the government may relax the assessment of total energy consumption, which is bad for carbon neutralization and related industries. In fact, on the one hand, with the gradual clarification of electricity price formation mechanism and the implementation of coal long-term association pricing, the cost fluctuation of thermal power industry has been ironed out and the fundamentals have been improved; On the other hand, national leaders have repeatedly stressed on different occasions that they will unswervingly adhere to the goal of “double carbon”. Therefore, under the background of rising thermal power prices and the construction of a national unified power market system, there is still room to improve the green power premium and consumption ratio. New energy operators and operators of traditional coal power transformation to new energy power generation are expected to benefit fully
Investment suggestion (environmental protection): according to the 14th five year plan for the development of circular economy, by 2025, China’s resource recycling industry system will be basically established, the resource recycling system covering the whole society will be basically completed, the resource utilization efficiency will be greatly improved, and the substitution ratio of renewable resources to primary resources will be further improved. With the accelerated development of renewable resources industry and the rapid opening of market space, relevant enterprises will also usher in a period of rapid growth. Hazardous waste recycling, waste incineration, recycled plastics and other fields deserve attention.
Recommended concerns: China Power (2380. HK), Huaneng Power International Inc(600011) (600011. SH), China Three Gorges Renewables (Group) Co.Ltd(600905) (600905. SH), Longyuan Power (001289. SZ), Beijing Geoenviron Engineering & Technology Inc(603588) (603588. SH), Zhefu Holdings (002266. SZ), Hanlan environment (600323. SH), Yingke regeneration (688087. SH).
Risk warning: the risk that the policy strength is less than expected; The risk that the project construction progress is less than expected; Risk that the output of new energy power generation is less than expected; Risks of intensified industry competition; The risk of subsidy decline in subdivided industries.
