Core view
One week market review: in February, the CSI 300 index rose 0.39%, the power and utility index rose 7.89%, and the monthly relative yield was 7.50%. In the Shenwan industry category, the increase of public utilities ranked fifth in 28 industries. By sector, the environmental protection engineering and service sector rose 7.70%; Among the sub sectors of the power sector, thermal power rose by 8.66%; Hydropower rose by 5.68%, and new energy power generation rose by 6.81%; Water sector rose 6.25%; The gas sector rose 8.17%.
Comments on changes: the overall situation of all sectors was good in February, and individual stocks in all sectors basically showed an upward trend. Benefiting from the growth expectation of soil survey and environmental protection investment, the environmental protection sector rose by 7.7% this month, of which Bceg Environmental Remediation Co.Ltd(300958) (33.82%) and Beijing Spc Environment Protection Tech Co.Ltd(002573) (29.34%) increased the most. Affected by the coal price stabilization policy, the thermal power sector increased by 8.66%, of which Inner Mongolia Mengdian Huaneng Thermal Power Corporation Limited(600863) (22.81%) increased the most. The new energy sector rose 6.81% due to the impact of various policies, with larger increases of Ning Xia Yin Xing Energy Co.Ltd(000862) (32.63%) and Sichuan New Energy Power Company Limited(000155) (26.04%). Affected by natural gas prices, the gas sector rose significantly by 8.17%.
The subsidy policies for new energy power generation are sorted out, and the problem of insufficient subsidy needs to be solved. In order to promote the healthy and sustainable development of new energy power generation industry and improve the quality of development. Since 2006, China has implemented a subsidy policy based on fixed electricity price for renewable energy power generation, and the subsidy source is the renewable energy electricity price surcharge levied with the electricity price. Renewable energy power generation projects are developing rapidly, the subsidy fund gap continues to increase, and the time for the state to issue renewable energy subsidies lags behind. It is estimated that after the electricity price subsidy gap reaches the peak in 2028, the fund income will be greater than the demand for new subsidies in each year in the future. The renewable energy electricity price additional fund is able to bear the subsidies for stock projects and repay the special debt of renewable energy. Therefore, it is not ruled out that the subsidies will be repaid in advance through special bonds, and will be repaid year by year through the additional funds of renewable energy electricity price in the future. The settlement of subsidies will greatly improve the financial structure of enterprises, alleviate the pressure of cash flow and realize a new round of great development of new energy industry in the era of parity.
Investment strategy: Public Utilities: 1. The reform of electricity marketization is promoted, and the electricity price can better reflect the value of supply and demand, cost and environment. The construction cost of new energy continues to decline. New energy operators have "triple" certainty, and the growth rate of "quantity" - scenery installation has high certainty; "Price" - the price of thermal power rises, the green premium is superimposed, and the profit space of green power is opened; "Performance" - this year's low-cost fans and rush to install sea breeze ensure the performance of next year. 2. The policy promotes the optimal combination of coal and new energy. The policy of Changxie coal price + Changxie electricity price is expected to be implemented, the linkage mechanism is formed, the market-oriented trading of coal and electricity is expanded, and the turning point of thermal power profit appears. 3. The construction of new power system with new energy as the main source will deeply benefit new energy power producers and comprehensive electric energy services. It is recommended to actively transform new energy sources with abundant cash flow, leading thermal power Huaneng Power International Inc(600011) etc; The new energy operation leaders China Three Gorges Renewables (Group) Co.Ltd(600905) , Longyuan Power with capital cost and resource advantages recommend good cash flow, "nuclear power and new energy" two wheel drive China National Nuclear Power Co.Ltd(601985) , and comprehensive power service Suwen Electric Energy Technology Co.Ltd(300982) . Environmental protection industry: 1. High performance and low valuation; 2. The business model is improved, and the operation indicators continue to improve: 3. The stable growth operation attribute appears, and the yield and cash flow indicators continue to improve. Recommend recycled paper as the leading Zhejiang Rongsheng Environmental Protection Paper Joint Stock Co.Ltd(603165) .
Risk warning: the environmental protection policy is not as expected; The growth rate of power consumption decreased; Electricity price reduction; The terminal price of natural gas has been reduced.
