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 seven ministries and commissions jointly issued the action plan for the comprehensive management of key sea areas. The action plan for the comprehensive treatment of key sea areas has made arrangements for the overall requirements, main objectives, key tasks and safeguard measures of the comprehensive treatment of three key sea areas during the 14th Five Year Plan period, including the Bohai Sea, the Yangtze River Estuary Hangzhou Bay and the adjacent waters of the Pearl River Estuary. The action plan proposes that by 2025, the proportion of excellent water quality (class I and II) in the three key sea areas will increase by about 2 percentage points compared with that in 2020, the investigation and regulation of sewage outlets into the sea will be steadily promoted, and the inferior class V will be basically eliminated in the sea sections of major rivers.
The Jiangsu provincial government printed and distributed the ecological environment infrastructure construction plan of Jiangsu Province during the 14th Five Year Plan period. The plan specifies that a modern ecological environment infrastructure system will be built by 2025. Among them, the centralized collection rate of urban domestic sewage in the province has reached an average of 80%, the sewage pipe network in industrial parks at or above the provincial level and the parks where major water related industries are located is fully covered, the comprehensive utilization rate of general industrial solid waste is stable at more than 90%, 5 “ecological island” pilot zones have been established, and 40 ecological security buffer zones have been built in the province.
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) Key targets: 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: comprehensively recommend environmental protection asset logic 2.0: steady growth + new tools + new fields, environmental protection asset investment logic 2.0; 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.
