The notice of the third national soil survey and the target of sea area governance in 2025 were issued. 1. On February 16, the notice of the State Council on carrying out the third national soil survey was issued, which decided to carry out the third national soil survey from 2022. The notice specifies that the third National Soil Survey needs to comprehensively find out China’s soil types and distribution laws, the current situation and change trend of soil resources, truly and accurately grasp the basic data such as soil quality, properties and utilization, and improve the level of soil resource protection and utilization. The purpose of this national soil survey is to identify and collect China’s basic soil data. The survey covers a wide range of soils and has many types. It is expected to significantly boost the demand of the soil testing industry and the prosperity of the soil remediation industry during the 14th Five Year Plan period. In terms of testing, it is recommended to pay attention to the testing leader Centre Testing International Group Co.Ltd(300012) with a national soil pollution detailed survey and testing laboratory. In terms of soil remediation, it is recommended to pay attention to (1) the first batch of national key promotion and demonstration of soil heavy metal remediation technology Yonker Environmental Protection Co.Ltd(300187) ; (2) The market share of soil remediation business is Beijing Geoenviron Engineering & Technology Inc(603588) . 2. On February 18, the Ministry of ecological environment and the national development and Reform Commission jointly issued the action plan for the comprehensive treatment of key sea areas. The plan proposes that by 2025, the ecological environment of the Bohai Sea, the Yangtze River Estuary Hangzhou Bay and the adjacent waters of the Pearl River Estuary will continue to improve, and the comprehensive management ability of the ecological environment of land and sea will be significantly enhanced. The proportion of excellent water quality (class I and II) in the three key sea areas increased by about 2 percentage points compared with 2020. For the sewage outlets entering the sea, according to the requirements of “all outlets shall be inspected, and they shall be inspected as much as possible”, we will comprehensively promote the investigation of sewage outlets entering the sea in the adjacent waters of the Yangtze River Estuary Hangzhou Bay and the Pearl River Estuary; Strengthening the control, supervision and law enforcement of total nitrogen emission from fixed pollution sources in coastal cities is expected to open the demand space for sewage treatment and benefit leading water enterprises. (1) Valuation and dividend rate of Hongshui city; (2) World class membrane equipment manufacturer and supplier Beijing Originwater Technology Co.Ltd(300070) .
New loans exceeded expectations, and the scale of new loans in a single month hit a record high. According to the macro statistics of Guosheng, RMB loans increased by 3.98 trillion in January 2022, which is expected to be 3.77 trillion, compared with 3.58 trillion in the same period last year; Social finance increased by 6.17 trillion, expected to be 5.45 trillion, compared with 5.19 trillion in the same period last year; The growth rate of social finance stock was 10.5%, the former value was 10.3%;. Since 2022, the financing of credit cooperatives has been significantly higher than the market expectation. The medium and long-term loans have increased year-on-year for the first time in six months. The growth rate of the stock of social finance has rebounded for three consecutive months, all pointing to the continuous development of the steady growth policy and the widening of credit. Environmental protection enterprises have ushered in a financing market with further optimized market credit structure and warmer economic expectations.
Valuation bottomed out, focusing on stable operating assets and companies with reversed fundamentals. Over the past three years, the performance of the environmental protection sector has been sluggish, and the valuation and positions are still low. The introduction of environmental protection REITs provides new equity financing tools. Pollution control operations such as urban sewage and waste treatment, solid waste and hazardous waste treatment are key industries. Enterprises with strong technical advantages and high wall barrier are favored. 1. Waste incineration companies with strong growth and certainty, Focus on Zhejiang Weiming Environment Protection Co.Ltd(603568) (ROE industry-leading and sufficient orders), Grandblue Environment Co.Ltd(600323) (steady growth and obvious valuation advantages); 2. Hazardous waste disposal companies with rich projects in hand, strong technology and high barriers pay attention to Zhefu Holding Group Co.Ltd(002266) (new leader of hazardous waste and layout of the whole industrial chain), Beijing Geoenviron Engineering & Technology Inc(603588) (leader of soil remediation benefiting from financing improvement); 3. Water companies whose value is expected to be revalued pay attention to Hongcheng water industry (Jiangxi sewage market has great potential, and the valuation and dividend rate are attractive).
Industry news: 1) the four ministries and commissions jointly issued the construction plan of major ecological protection and restoration projects in the northern sand prevention zone (2021-2035); 2) The Ministry of industry and information technology and other three departments issued the action plan for high quality development of environmental protection equipment manufacturing industry (2022-2025).
Plate Market Review: the environmental protection sector performed well this week, outperforming the market and the gem. Last week, the Shanghai Composite Index rose by 0.80%, the gem index rose by 2.39%, the environmental protection engineering and services (Shenwan) rose by 3.52%, outperforming the Shanghai Composite Index by 2.72% and the gem by 1.13%; Public utilities rose by – 1.21%, underperforming the Shanghai Composite Index by – 2.01% and the gem by – 3.60%. Monitoring (4.35%), atmosphere (2.37%), water treatment (2.48%), solid waste (2.39%), water operation (1.46%), energy saving (3.91%).
Risk tip: the environmental protection policy and supervision are less than expected, and the industry demand is less than expected.
