Market review: as of February 25, 2022, Shenwan environmental protection industry fell by 1.74% in the week, 0.06 percentage points lower than the CSI 300 index and ranked 17th among Shenwan 31 industries; Shenwan environmental protection sector rose 6.60% in the month, outperforming the Shanghai and Shenzhen 300 index by 6.38 percentage points, ranking 8th among Shenwan 31 industries; Shenwan environmental protection sector has increased by 15.48% since the beginning of 2021, outperforming the Shanghai and Shenzhen 300 index by 27.72 percentage points and ranking ninth among Shenwan 31 industries.
As of February 25, 2022, the sub boards of Shenwan environmental protection industry fell in that week, the environmental governance sector fell by 2.02%, and the environmental protection equipment sector fell by 0.03%. Among the top ten stocks that rose in the week, Wuhan Xianglong Power Industry Co.Ltd(600769) , Fujian Longking Co.Ltd(600388) and Wangneng Environment Co.Ltd(002034) ranked among the top three in Shenwan environmental protection sector, up 11.88%, 7.52% and 7.21% respectively. Among the top ten stocks that fell in the week, Kingland Technology Co.Ltd(000711) , Qianjiang Water Resources Development Co; Ltd(600283) and Bceg Environmental Remediation Co.Ltd(300958) fell significantly, with declines of 15.35%, 12.51% and 12.09% respectively.
Valuation: as of February 25, 2022, the PE (TTM) of Shenwan environmental protection sector was 21.45 times; In terms of sub sectors, the PE (TTM) of Shenwan environmental treatment sector is 20.86 times, and the PE (TTM) of Shenwan environmental protection equipment sector is 25.88 times.
Prospect of the two sessions: the national “two sessions” in 2022 will be held from March 4 to 5. The contents related to the environmental protection industry in the 2022 proposal include: (1) promoting the recovery and reuse of domestic sewage heat energy; (2) Strengthen the pollution prevention and control of waste electrical and electronic products; (3) Strengthen the control of agricultural non-point source pollution in the Yangtze River Basin; (4) Strengthen the ecological protection of the source area of the Yellow River; (5) Promote the quality and efficiency improvement of carbon finance market; (6) Strengthen the protection and management of coastal beaches and wetlands.
Zhou viewpoint of environmental protection industry: the contents related to the environmental protection industry in the proposal of the “two sessions” in 2022 include: (1) promoting the recovery and reuse of domestic sewage heat energy; (2) Strengthen the pollution prevention and control of waste electrical and electronic products. Promote domestic sewage heat recovery and reuse, increase investment in environmental infrastructure such as sewage recovery, which is in line with the policy direction of environmental infrastructure. The investment demand is expected to increase, and the water treatment industry is expected to receive financial support. It is suggested to pay attention to the targets of the water treatment industry Beijing Originwater Technology Co.Ltd(300070) ( Beijing Originwater Technology Co.Ltd(300070) ), Chengdu Xingrong Environment Co.Ltd(000598) ( Chengdu Xingrong Environment Co.Ltd(000598) ). In terms of solid waste treatment, the waste incineration power generation industry is in line with the policy direction of environmental infrastructure, and the market scale is expected to expand. It is suggested to pay attention to the targets of waste incineration power generation industry Zhejiang Weiming Environment Protection Co.Ltd(603568) ( Zhejiang Weiming Environment Protection Co.Ltd(603568) ), Chongqing Sanfeng Environment Group Corp.Ltd(601827) ( Chongqing Sanfeng Environment Group Corp.Ltd(601827) ), Wangneng Environment Co.Ltd(002034) ( Wangneng Environment Co.Ltd(002034) ). In addition, deputies to the National People’s Congress suggested that the government should issue opinions on the recycling and treatment of E-Waste and establish reward and subsidy policies and incentive mechanisms for formal recycling enterprises. The proposal is highly in line with the development concept of reducing pollution and carbon in China, and is expected to promote the introduction of relevant policies, so as to promote the development of e-waste disposal industry. It is suggested to pay attention to the industry target of e-waste disposal Gem Co.Ltd(002340) ( Gem Co.Ltd(002340) ).
Risk warning: policy promotion is not as expected; The construction progress of the project is less than expected; Product price fluctuation risk; The consumption of electronic products is lower than expected.
