Key recommendations: Suzhou Shijing Environmental Technology Co.Ltd(301030) , Miracle Automation Engineering Co.Ltd(002009) , Beijing Geoenviron Engineering & Technology Inc(603588) , Shandong Intco Recycling Resources Co.Ltd(688087) , Henan Bccy Environmental Energy Co.Ltd(300614) , Yutong Heavy Industries Co.Ltd(600817) , Everbright environment, Grandblue Environment Co.Ltd(600323) , Jiangxi Hongcheng Environment Co.Ltd(600461) , country garden services, Fujian Longma Environmental Sanitation Equipment Co.Ltd(603686) , China Resourcesand Environment Co.Ltd(600217)
It is suggested to pay attention to: Zhejiang Weiming Environment Protection Co.Ltd(603568) , Dynagreen Environmental Protection Group Co.Ltd(601330) , Chongqing Sanfeng Environment Group Corp.Ltd(601827) , green city service, China Tianying Inc(000035) , conch entrepreneurship
The central economic work conference proposed to shift the dual control index from energy consumption to carbon and accelerate the development of clean energy & renewable resources. The central economic work conference held from December 8 to 10 highlighted the tone of economic work in 2022. 1) Fiscal advance to release g-end demand: the meeting pointed out that next year’s economic work should be stable and seek progress while maintaining stability. We should ensure the intensity of fiscal expenditure, accelerate the progress of expenditure, and moderately advance infrastructure investment, which is conducive to the release of investment demand for environmental protection industry at the g-end. 2) Strengthen resource reuse and ensure the supply of primary products: the meeting proposed to promote comprehensive conservation, intensive and recycling of resources in the field of production, and accelerate the construction of waste recycling system. 3) Three major changes in carbon peak carbon neutralization: a) steadily promote the dual carbon goal under the tone of steady growth: the meeting proposed to unswervingly promote carbon peak carbon neutralization, but it is impossible to accomplish its work in one battle; b) Assessment indicators shift from energy consumption to carbon: the meeting pointed out that the new renewable energy and raw material energy consumption will not be included in the total energy consumption control, and the transformation from “double control” of energy consumption to “double control” of total carbon emission and intensity will be realized as soon as possible. This transformation highlights the general nature of carbon emissions in energy reform and further promotes the application of renewable energy and the development of resource recycling; c) Accelerate the implementation of the incentive and restraint mechanism for pollution reduction and carbon reduction: the carbon market is an effective mechanism to achieve the dual carbon goal. The extension of the carbon market to non electric and high energy consuming industries and the restart of CCER are 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. To resume the EU carbon market, the total amount control and MSR mechanism are the key to carbon price balance. The development of China’s carbon market is similar to that of the EU. It already has the prototype of 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 long-term upward trend of carbon price, 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 lasted for 4 years. We expect to basically perform 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: front-end energy structure adjustment, Pay attention to sanitation, new energy equipment and renewable energy (waste incineration, etc.) alternative demand. 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 / vehicles and hazardous waste recycling. 4) environmental consulting: the improvement of environmental management promotes the expansion of environmental consulting demand. 5) carbon trading: encourage renewable energy (waste incineration / biomass utilization, etc.), methane utilization (sewage treatment / biogas utilization), forestry carbon sequestration and other CCER projects.
Focus on clean energy, circular economy and methane emission reduction under the China US cooperation framework and the deployment of double carbon action. 1) Deepen clean energy: [photovoltaic treatment] the prosperity of photovoltaic is upward, and the demand for process pollution treatment equipment is released: it is recommended to pay attention to Suzhou Shijing Environmental Technology Co.Ltd(301030) ; [sanitation electrification] sanitation new energy helps to reach the peak of carbon, and Yutong’s share increases & profit leading verification advantage: it is recommended to pay attention to Yutong Heavy Industries Co.Ltd(600817) ; [waste incineration] the leader of waste incineration is always strong, the cash flow & profit is improved, the value is revalued, and Everbright environment is recommended; Excellent integration ability helps share expansion, and the cost reduction and efficiency increase expansion of large solid waste comprehensive industrial park can be expected: key recommendations: Grandblue Environment Co.Ltd(600323) ; It is recommended to pay attention to Zhejiang Weiming Environment Protection Co.Ltd(603568) , Dynagreen Environmental Protection Group Co.Ltd(601330) , Chongqing Sanfeng Environment Group Corp.Ltd(601827) . 2) Circular economy development: [hazardous waste recycling] recycling high-quality tob track, copying Yuhong’s advantages and recycling the leader of recycling, with emphasis on Beijing Geoenviron Engineering & Technology Inc(603588) ; [battery regeneration] power battery regeneration welcomes the long-term and high boom, and the leading players in the automotive aftermarket actively layout and enter the site, with emphasis on Miracle Automation Engineering Co.Ltd(002009) ; [recycled plastics] it is the leader in the scarcity of recycled plastics, the whole industrial chain & global layout, technical advantages, and explore the blue ocean of plastic recycling, with emphasis on Shandong Intco Recycling Resources Co.Ltd(688087) ; It is suggested to pay attention to conch cement kiln for collaborative disposal of solid and hazardous wastes; 3) Increase the target of methane carbon reduction: [methane utilization] landfill gas is mainly composed of methane. The company is the leader of landfill gas power generation. The installed capacity will account for 20% in 2020. The profit elasticity of carbon emission reduction is large, and Henan Bccy Environmental Energy Co.Ltd(300614) is mainly recommended; Pioneer in biogas production and utilization of organic waste, with emphasis on Welle Environmental Group Co.Ltd(300190) . [water revaluation] high dividend & accelerated growth, revaluation of the value of comprehensive public utility platform, with emphasis on Jiangxi Hongcheng Environment Co.Ltd(600461) ; It is suggested to pay attention to China’s water affairs.
Latest research: Policy comments: the 14th five year industrial green development plan was issued to clarify the goal of reducing industrial carbon and improving resource utilization; Suzhou Shijing Environmental Technology Co.Ltd(301030) : Pan semiconductor process supporting equipment leader, integration & multi field expansion to help growth; Beijing Geoenviron Engineering & Technology Inc(603588) fixed increase comments: the chairman’s subscription shows confidence, the fixed increase is implemented, and the resource development is accelerated.
Risk tip: the policy promotion is less than expected, the interest rate is higher than expected, and the financial expenditure is lower than expected.
