Highlights: China water, 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 dual carbon top-level design of central enterprises focuses on high emission industries, builds a recycling industry & clean energy system, and strengthens green technology research. On December 30, 2021, SASAC issued the top-level design of dual carbon work of central enterprises, defined the phase III objectives, and required that the installed capacity of renewable energy power generation of central enterprises should account for more than 50% by 2025; Deploy five major tasks and propose that the increment of state-owned capital should be inclined to green and low-carbon industries. We will strengthen policy guidance and promote enterprises in industries with large emissions, such as coal and electricity, iron and steel, non-ferrous metals, building materials, petrochemical and chemical industry. 1) Build a resource recycling industrial system: promote the large-scale and standardized development of recycled metals, recycled plastics and waste batteries. 2) Build a clean and low-carbon energy system: develop biomass energy according to local conditions. 3) Strengthen scientific and technological research and innovative application of green low-carbon technology: research green hydrogen technology, etc.
The Ministry of Finance issued a subsidy of 4.48 billion yuan for biomass power generation by the State Grid in 2021, which was distributed in an orderly manner, and the expected gap was improved. On December 31, 2021, the State Grid announced that the Ministry of Finance had issued a total annual budget of 76.101 billion yuan for the company’s renewable energy electricity price additional subsidies, accounting for 85.44% of the total budget of the year, including 26.346 billion yuan for wind power generation, Cecep Solar Energy Co.Ltd(000591) 45.272 billion yuan for power generation and 4.483 billion yuan for biomass power generation, a decrease of 7.81% compared with the budget allocation of biomass power generation subsidies of the State Grid in 2020. In 2021, new projects will go online through competitive bidding & shared by the central and local governments, reducing the pressure of national subsidy, and the subsidy gap is expected to improve.
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: adjust the front-end energy structure, and pay attention to the substitution demand for 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.
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 cycle 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: China’s water: the water supply leader continues to grow, and the direct drinking water consumption is upgraded to rebuild China’s water; Suzhou Shijing Environmental Technology Co.Ltd(301030) : Pan semiconductor process supporting equipment leader, integration & multi field expansion to help growth; Policy comments: the 14th five year industrial green development plan was issued to clarify the goal of reducing industrial carbon and improving resource utilization.
Risk tip: the policy promotion is less than expected, the interest rate is higher than expected, and the financial expenditure is lower than expected.
