Key investment points:
Market review: as of March 4, 2022, Shenwan environmental protection industry rose 0.23% in the week, outperforming the Shanghai and Shenzhen 300 index by 1.91 percentage points, ranking ninth among Shenwan 31 industries; Shenwan environmental protection sector fell 0.80% in the month, outperforming the Shanghai and Shenzhen 300 index by 1.06 percentage points, ranking 16th among Shenwan 31 industries; Shenwan environmental protection sector has fallen 4.06% year to date, outperforming the CSI 300 index by 4.93 percentage points and ranking 13th among Shenwan 31 industries.
As of March 4, 2022, the sub sectors of the environmental protection industry of Shenwan had mixed gains and losses in that week, among which the environmental protection equipment sector fell by 2.43%, the atmospheric governance sector was flat, and the other three sectors rose. The comprehensive environmental governance sector rose by 1.19%, the water affairs and water governance sector rose by 0.73%, and the solid waste governance sector rose by 0.69%.
Among the top ten stocks that rose in the week, Jiangsu Jiangnan Water Co.Ltd(601199) , Focused Photonics (Hangzhou) Inc(300203) and Wuhan Xianglong Power Industry Co.Ltd(600769) ranked among the top three in Shenwan environmental protection sector, up 12.62%, 9.59% and 8.16% respectively. Among the top ten stocks that fell in the week, Tus Environmental Science And Technology Development Co.Ltd(000826) , Jiangsu Huahong Technology Co.Ltd(002645) and Hangzhou Dadi Haiyang Environmental Protection Co.Ltd(301068) fell significantly, with declines of 18.72%, 8.97% and 5.36% respectively.
In terms of Valuation: as of March 4, 2022, the PE (TTM) of environmental protection sector was 21.51 times; In terms of sub sectors, the PE (TTM) of the atmospheric treatment sector is 39.85 times, the PE (TTM) of the water affairs and water treatment sector is 25.86 times, the PE (TTM) of the solid waste treatment sector is 17.41 times, the PE (TTM) of the comprehensive environmental treatment sector is 47.60 times, and the PE (TTM) of the environmental protection equipment sector is 25.31 times.
Important news: at the “two sessions”, the government work report proposed to continuously improve the ecological environment and promote green and low-carbon development in 2022. We will strengthen pollution control, ecological protection and restoration, properly handle the relationship between development and emission reduction, and promote the harmonious coexistence between man and nature. We will strengthen the treatment of solid waste and new pollutants, and promote waste classification, reduction and recycling. We will improve support policies for environmental protection industries such as energy and water conservation and recycling of waste materials.
Zhou viewpoint of the environmental protection industry: at the “two sessions”, the government work report proposed that in 2022, we will strengthen the treatment of solid waste and new pollutants, implement waste classification, reduction and recycling, and improve environmental protection industry support policies such as energy and water conservation and recycling of waste materials. Recently, several local governments issued policies related to solid waste treatment. Hunan Province proposed to carry out the pilot of “point-to-point” directional utilization of hazardous waste in the province. Hainan Province required to further improve the long-term mechanism for pollution prevention and control of industrial solid waste, and Henan Province proposed to promote the establishment of a resource recycling system covering the whole society. Combined with the government work report and local government policies, we believe that in 2022, the government is expected to continue to introduce solid waste treatment policies to promote the development of the industry, and the fields related to solid waste treatment are expected to continue to benefit. It is suggested to pay attention to the targets of waste incineration power generation Zhejiang Weiming Environment Protection Co.Ltd(603568) ( Zhejiang Weiming Environment Protection Co.Ltd(603568) ), Dynagreen Environmental Protection Group Co.Ltd(601330) ( Dynagreen Environmental Protection Group Co.Ltd(601330) ), Chongqing Sanfeng Environment Group Corp.Ltd(601827) ( Chongqing Sanfeng Environment Group Corp.Ltd(601827) ), The subject matter of solid waste and hazardous waste recycling Zhefu Holding Group Co.Ltd(002266) ( Zhefu Holding Group Co.Ltd(002266) ), Beijing Geoenviron Engineering & Technology Inc(603588) ( Beijing Geoenviron Engineering & Technology Inc(603588) ), and the subject matter of electronic 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.
