We will continue to promote green development in urban and rural areas and pay attention to the opportunities of hazardous waste and water treatment. 1. On March 15, the national development and Reform Commission issued the “printing and distributing the implementation plan of the 14th five year plan for the development of urban agglomerations in the middle reaches of the Yangtze River”. The plan proposes to improve urban and rural sewage and garbage collection and treatment facilities, and vigorously implement rainwater and sewage diversion, sewage interception and drainage; By 2025, the centralized collection rate of urban domestic sewage will reach more than 70%, and the construction of centralized sewage treatment facilities in industrial parks will be accelerated. The plan emphasizes the whole chain treatment of sewage monitoring, traceability and remediation, which is expected to improve the sewage treatment capacity & concentration and benefit the leading water enterprises and water treatment equipment suppliers. It is recommended to pay attention to 1) Hongcheng water industry with attractive valuation and dividend yield; 2) World class membrane equipment manufacturer and supplier Beijing Originwater Technology Co.Ltd(300070) . On March 2, 2022, the National Commission for the development of new urbanization issued the key task of promoting the quality of new-type urbanization. The mission emphasizes promoting green and low-carbon development, improving the centralized treatment devices for hazardous waste and medical waste and the comprehensive utilization system of solid waste. The task is expected to further sink the treatment of solid and hazardous wastes to cities and towns, increase the demand space, and the leading enterprises are expected to obtain more orders. Recommended concerns: 1) hazardous waste disposal companies with rich projects in hand and strong technical barriers Zhefu Holding Group Co.Ltd(002266) ; 2) There are many high-quality projects for hazardous waste and waste incineration, and the operation is accelerated Beijing Geoenviron Engineering & Technology Inc(603588) .
New loans exceeded expectations, and the scale of new loans in a single month hit a record high. According to the macro statistics of Guosheng, RMB loans increased by 3.98 trillion in January 2022, which is expected to be 3.77 trillion, compared with 3.58 trillion in the same period last year; Social finance increased by 6.17 trillion, expected to be 5.45 trillion, compared with 5.19 trillion in the same period last year; The growth rate of social finance stock was 10.5%, the former value was 10.3%;. Since 2022, credit social finance has significantly exceeded market expectations. Medium and long-term loans have increased year-on-year for the first time in six months. The growth rate of social finance stock has rebounded for three consecutive months, pointing to the continuous development of stable growth policy and the road of credit relief. The credit structure of enterprises is expected to be further improved and the financing market for environmental protection is expected to pick up.
Valuation bottomed out, focusing on stable operating assets and companies with reversed fundamentals. Over the past three years, the performance of the environmental protection sector has been sluggish, with valuations and positions still at a low level. The introduction of environmental protection REITs provides new equity financing tools. Pollution control operations such as urban sewage and waste treatment, solid and hazardous waste treatment are the key industries. Enterprises with strong technical advantages and high wall barrier are favored. 1. Waste incineration companies with strong growth and certainty are concerned about Zhejiang Weiming Environment Protection Co.Ltd(603568) (ROE industry leader and sufficient orders) Grandblue Environment Co.Ltd(600323) (steady growth and obvious valuation advantages); 2. Hazardous waste disposal companies with rich projects in hand, strong technology and high barriers pay attention to Zhefu Holding Group Co.Ltd(002266) (new leader of hazardous waste and layout of the whole industrial chain), Beijing Geoenviron Engineering & Technology Inc(603588) (leader of soil remediation benefiting from financing improvement); 3. Water companies whose value is expected to be revalued pay attention to Hongcheng water industry (Jiangxi sewage market has great potential, and the valuation and dividend rate are attractive).
Industry news: 1) the total trading volume of carbon emission quota in the national carbon market this week is 355000 tons, with a total turnover of 19.723 million yuan. The weekly trading volume of listing agreement trading is 14000 tons, the weekly turnover is 816000 yuan, the highest transaction price is 58.0 yuan / ton, the lowest transaction price is 57.0 yuan / ton, and the closing price on Friday is 58.0 yuan / ton, up 0.69% from last Friday. 2) Opinions on Further Strengthening the prevention and control of heavy metal pollution issued by the Ministry of ecology and environment; 3) Notice on carrying out operation and maintenance monitoring of cement kiln for collaborative disposal of solid waste issued by the national quality supervision, inspection and testing center of building materials industry and building materials machinery products.
Plate Market Review: the environmental protection sector performed poorly this week, losing the market and outperforming the gem. Last week, the Shanghai Composite Index fell by – 1.77%, the gem index rose by 1.81%, environmental protection projects and services fell by – 3.86%, outperforming the Shanghai Composite Index by 2.09% and the gem by 5.67%; The decline of public utilities was – 4.18%, underperforming the Shanghai Composite Index by 2.41% and the gem index by 5.95%. Monitoring (- 4.08%), atmosphere (- 4.59%), water treatment (- 3.01%), solid waste (- 3.96%), water operation (- 5.08%), energy saving (- 4.01%).
Risk tip: the environmental protection policy and supervision are less than expected, and the industry demand is less than expected.
