Market review: from April 6 to April 8, the power, environmental protection, gas and water sectors fell by 0.15%, 1.48%, 1.07% and 1.78% respectively, and the CSI 300 index fell by 1.06% in the same period.
Association triggered by a paper announcement: Longi Green Energy Technology Co.Ltd(601012) on April 5, it was announced that Yunnan Provincial Development and Reform Commission cancelled the preferential tariff policies and measures enjoyed by the company in Yunnan Province according to the requirements of relevant national departments to clean up the preferential tariff policies. We believe that: 1) the adjustment of individual electricity price on the downstream user side is not directly related to the upstream power generation side. On the surface, the upward power purchase price of some high energy consuming enterprises in Yunnan will be transmitted to the upstream power generation side, but the actual situation is that in the past, this part of the preferential price was subsidized by the local government and has no direct relationship with the power generation side. Now it is only cancelled in response to the requirements of the documents of the national development and Reform Commission in 2021. 2) Southwest hydropower and northwest new energy may increase electricity prices. In 2021, the national development and Reform Commission required to cancel the preferential electricity price and special transaction preferential electricity price for high energy consuming industries. The special transaction in Guangxi, Guizhou and other places is to subsidize the downstream user side by reducing the price on the power generation side. If it is cancelled, it will benefit the local power generation enterprises.
The national development and Reform Commission issued the implementation plan of the 14th five year plan for the construction of Beibu Gulf Urban Agglomeration: on ecological governance, the plan puts forward: 1) promote joint prevention and treatment of environmental pollution. Improve the collection and treatment capacity of urban sewage and garbage, promote the comprehensive utilization of solid waste in coastal cities, promote the construction of “waste free cities”, and promote the prevention and control of soil pollution and safe utilization of agricultural land. 2) Accelerate the green and low-carbon transformation, and accelerate the green and recycling transformation of port steel, petrochemical, papermaking, building materials and other industries. 3) We will accelerate the establishment of a value realization mechanism for ecological products. We believe that the proposal of the plan will help: 1) promote regional sewage treatment and resource utilization, speed up the aging, renewal and transformation of water supply and drainage projects and release the potential market space. 2) Improve the comprehensive utilization rate of bulk industrial solid waste and the construction of waste classification system in Beibu Gulf coastal cities, and speed up the promotion of soil remediation projects. 3) It will promote the green upgrading and transformation of relevant industries and increase the demand for advanced environmental protection equipment.
Investment suggestion: for the adjustment of preferential tariff policies for industries such as high energy consumption on the downstream user side, the conduction effect on the upstream power generation side needs to be personalized analyzed. Recommend China Yangtze Power Co.Ltd(600900) , China National Nuclear Power Co.Ltd(601985) , Shenergy Company Limited(600642) , China Three Gorges Renewables (Group) Co.Ltd(600905) , and Sdic Power Holdings Co.Ltd(600886) , Cgn Power Co.Ltd(003816) . Promoting “waste free cities” and building green low-carbon urban agglomeration will help accelerate the green upgrading and transformation of high emission industries, solve the problems related to solid waste recycling, sewage treatment and soil remediation, and drive the healthy and orderly development of regional economy. Carefully recommend Beijing Geoenviron Engineering & Technology Inc(603588) , and pay attention to Grandblue Environment Co.Ltd(600323) .
Risk tip: declining demand; Price reduction; Rising costs; Reduction of precipitation; Local financial pressure; Policy promotion lags behind.
