Key recommendations: Miracle Automation Engineering Co.Ltd(002009) , Beijing Geoenviron Engineering & Technology Inc(603588) , Yutong Heavy Industries Co.Ltd(600817) , Beijing Sanlian Hope Shin-Gosentechnical Service Co.Ltd(300384) , Shandong Intco Recycling Resources Co.Ltd(688087) , Suzhou Shijing Environmental Technology Co.Ltd(301030) , Everbright environment, Dynagreen Environmental Protection Group Co.Ltd(601330) , Grandblue Environment Co.Ltd(600323) , China water, Jiangxi Hongcheng Environment Co.Ltd(600461) , Henan Bccy Environmental Energy Co.Ltd(300614) , Fujian Longma Environmental Sanitation Equipment Co.Ltd(603686) , China Resourcesand Environment Co.Ltd(600217)
Suggestions: Road Environment Technology Co.Ltd(688156) , Zhejiang Weiming Environment Protection Co.Ltd(603568) , Wangneng Environment Co.Ltd(002034) , Chongqing Sanfeng Environment Group Corp.Ltd(601827) , China Tianying Inc(000035) , conch entrepreneurship, Jiangxi Jovo Energy Co.Ltd(605090) , Beijing Capital Eco-Environment Protection Group Co.Ltd(600008)
The national development and Reform Commission issued opinions on the green and low-carbon transformation of energy, improved the market mechanism and accelerated the development of clean energy. The national development and Reform Commission and the Energy Administration issued the opinions on improving the institutional mechanisms and policies and measures for green and low-carbon energy transformation. The opinions put forward 35 specific requirements in ten aspects, including: 1) strengthen the top-level design, accelerate the construction of national carbon market, energy right trading market and green power trading market, improve and promote green power certificate trading, and promote green power consumption; 2) Build a clean and low-carbon energy supply system, and give priority to supporting biogas power generation and other biomass power generation connected to the power grid in rural areas; 3) We will promote clean energy vehicles such as electric and hydrogen energy, and improve the layout and service facilities of charging and changing electricity, hydrogenation and gas filling stations.
We will accelerate urban environmental infrastructure, help stabilize growth, and focus on solid waste / water / pipe network investment. Recently, the national development and Reform Commission issued the guiding opinions on accelerating the construction of urban environmental infrastructure, which requires to comprehensively improve the level of environmental infrastructure and build an environmental infrastructure system integrating facilities and monitoring and supervision capacity in the four fields of sewage, garbage, solid waste, hazardous waste and medical waste treatment and disposal. On the basis of continuing the quantitative objectives in the early stage, the opinions put forward measures such as making up the shortcomings and improving the security system to speed up the urban environmental infrastructure construction. Agriculture, forestry, water conservancy and ecological environmental protection are the key investments of special bonds in 2022, and the investment in solid waste, water affairs and urban pipe network is expected to accelerate.
Benchmarking the EU to see the development of China’s carbon market: the two core mechanisms are taking shape, the carbon price is rising for a long time, and CCER is bullish for a short time. For the resumption of the EU carbon market, the total amount control and MSR mechanism are the key to the carbon price balance. The development of China’s carbon market is similar to that of the EU, and has the prototype of the total amount control market regulation mechanism. At present, the transaction scale and covering industries have large room to improve, the carbon price is far lower than overseas, the double carbon target time is tight, the task is heavy, the total amount tightening drives the carbon price to rise for a long time, and the carbon market releases the demand of CCER, Previously, the recorded emission reduction of CCER in China totaled more than 50 million tons, which took four years. We expect to basically fulfill the contract, and the approval policy is expected to restart. We expect the supply scarcity price of CCER to rise in the near future.
Carbon neutralization investment framework and environmental protection industry mapping: build an investment framework from front-end energy substitution, middle-end energy conservation and emission reduction and back-end recycling, and provide effective institutional support for carbon trading. From the perspective of environmental protection, 1) energy substitution: adjust the front-end energy structure, and pay attention to the substitution demand of sanitation new energy equipment and renewable energy (waste incineration, etc.). 2) Energy conservation and emission reduction: promote industrial transformation in the middle end and pay attention to energy conservation management & Application of emission reduction equipment. 3) Recycling: promote the recycling of renewable resources such as waste classification, waste household appliances / cars and hazardous waste recycling. 4) Environmental consultation: the improvement of environmental management promotes the expansion of the demand for environmental consultation. 5) Carbon trading: encourage the development of CCER projects such as renewable energy (waste incineration / biomass utilization), methane utilization (sewage treatment / biogas utilization), forestry carbon sequestration, etc.
Steady growth + undervalued value + high dividend + new track, fully recommend low-carbon environmental protection assets: 1) environmental asset value + Growth Logic 2.0: a) steady growth + new tools + new fields, from single dimension to combination. ① Policy +: double carbon macro policy, strengthening and increasing infrastructure investment; ② Mode +: REITs improves the return on assets and opens the growth ceiling; ③ Space +: the second growth curve. B) The value of cash flow driven by marketization is further highlighted: policy tools such as CCER green power, waste incineration bidding and marketization of water price enhance the certainty of return and improve cash flow. 2) Under the new logic, the valuation anchor has been significantly improved: undervalued + low position + growth, improved model and cash flow, and improved valuation. 3) Suggestions: a) steady growth / high dividend / REITs: waste incineration [ Dynagreen Environmental Protection Group Co.Ltd(601330) ], water + pipe network [ Beijing Capital Eco-Environment Protection Group Co.Ltd(600008) ] [ Jiangxi Hongcheng Environment Co.Ltd(600461) ], water supply price increase + direct drinking water [China water]. B) new track: 1. Renewable resources: the most economical carbon premium + resource price increase: hazardous waste [ Beijing Geoenviron Engineering & Technology Inc(603588) ], liquor Baijiu [ Road Environment Technology Co.Ltd(688156) ], power battery reuse [ Miracle Automation Engineering Co.Ltd(002009) ], recycled plastic [ Shandong Intco Recycling Resources Co.Ltd(688087) ][ Beijing Sanlian Hope Shin-Gosentechnical Service Co.Ltd(300384) ]; ② Hydrogen energy: [ Jiangxi Jovo Energy Co.Ltd(605090) ]; ③ High nickel matte: [ Zhejiang Weiming Environment Protection Co.Ltd(603568) ].
Latest research: industry comments: urban environmental infrastructure accelerates and contributes to steady growth, focusing on solid waste / water / pipe network investment; Soochow Securities Co.Ltd(601555) annual strategy of the environmental protection industry in 2022: double carbon vowels, rhythm and more circulation.
Risk tip: the policy promotion is less than expected, the interest rate rises more than expected, and the fiscal expenditure is lower than expected.
