Market review: in March, the CSI 300 index fell 7.84%, the power and utility index fell 9.61%, and the monthly relative yield was – 1.77%. In the Shenwan industry category, the increase of public utilities ranked 18th in 28 industries. By sector, the environmental protection engineering and service sector fell 9.54%; Among the sub sectors of the power sector, thermal power decreased by 13.04%; Hydropower fell by 5.75%, and new energy power generation fell by 8.82%; Water sector fell 4.14%; The gas sector fell 10.17%.
Comments on changes: affected by the international situation and the overall market, most of the stocks in each section fell significantly in March. In the environmental protection sector, benefiting from a number of new water conservancy projects and the western development, Xinjiang Guotong Pipeline Co.Ltd(002205) increased the most by 22.65%, and Zhejiang Tuna Environmental Science & Technology Co.Ltd(603177) launched the equity incentive plan, increased by 8.11%. In the new energy sector, St Colin fell into bankruptcy dispute and still launched the equity incentive plan. The share price fell and rose by the limit for many times in March, with a final increase of 10.68%. The business of China National Nuclear Power Co.Ltd(601985) 2021 and the first quarter of 2022 achieved high growth, and the share price rose by 9.59%; Stimulated by the national water conservancy investment, 8 companies in the water sector achieved share price rise, of which Anhui Huaqi Environmental Protection&Technology Co.Ltd(300929) performance increased steadily, with an estimated increase of 25.39%.
Special research: new energy storage development scheme to ensure the smooth transformation of new energy power system
The implementation plan for the development of new energy storage in the 14th five year plan points out that “clarify the independent market position of new energy storage, energy storage will enter large-scale development in 2025, realize the full marketization of new energy storage in 2030, and basically meet the needs of building a new power system”. At present, the pace of electrochemical energy storage research and development is further accelerated, various technologies and industrial pilot projects are steadily promoted, and the cost of electrochemical energy storage will be reduced by 30% in the future. The construction cost of pumped storage power station is about 6 yuan / watt, and the kilowatt hour cost is only 0.21-0.29 yuan / kWh. At present, it has a certain cost advantage.
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. Recommend good cash flow, “nuclear power and new energy” two wheel drive China National Nuclear Power Co.Ltd(601985) ; It is recommended to actively transform new energy sources with abundant cash flow, leading thermal power Huaneng Power International Inc(600011) etc; New energy operation leader with capital cost and resource advantages China Three Gorges Renewables (Group) Co.Ltd(600905) ; Comprehensive electric energy service Suwen Electric Energy Technology Co.Ltd(300982) . Environmental protection industry: 1. High performance and low valuation; 2. 3. Continuous improvement of cash flow and business indicators: continuous improvement of business income. 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.
