Market review: from April 18 to April 22, the power, environmental protection, gas and water sectors changed by 0.37%, – 3.72%, – 3.11% and – 4.16% respectively, and the Shanghai and Shenzhen 300 index fell by 4.19% in the same period.
The “420” national standing committee requires coal to increase production, approve new nuclear power units, and AP1000 “come back from the dead”: 1) through measures such as nuclear capacity increase and new coal mine projects, 300 million tons of coal capacity will be added this year; 2) Approve 6 new nuclear power units. We believe that: 1) in the face of the rapid decline in the power demand of the whole society dominated by secondary production caused by “power restriction” and “production restriction” caused by high coal prices in 2021, under the requirements of ensuring economy and demand, increasing coal production is inevitable and in line with expectations. 2) Previously, we proposed that the approval of new units in 2022 still needs to be accelerated to ensure the healthy development of the nuclear power industry and the orderly promotion of the dual carbon goal. The approval of 6 units meets the expectation. The six new units were not unexpected. What was more unexpected was that four of them were cap1000 (the localized version of Westinghouse’s third generation nuclear power technology AP1000). The approval of Haiyang phase II and Sanmen phase II this time can avoid the waste of a large amount of funds invested in preliminary preparation. Taking CNNC as an example, by the end of June 2021, Sanmen phase II had invested 8.9 billion yuan, and xudabao phase I and phase II had invested 14.3 billion yuan in total. The approval and promotion of the project can avoid the daily loss of asset impairment.
The two ministries and commissions jointly issued the guidelines on social capital investment in agriculture and rural areas (2022): on environmental governance, the guidelines put forward the following three measures: 1) green development of agriculture and rural areas. Support social capital to participate in the construction of resource recovery projects and increase investment in collection, storage, transportation and treatment systems; 2) Rural agricultural infrastructure construction. Support social capital to participate in the construction of rural water supply projects, the standardization and transformation of small-scale projects, and the construction of clean energy such as biomass energy; 3) Renovation of rural residential environment. Support social capital to participate in rural toilet revolution, domestic waste treatment, domestic sewage treatment, etc. We believe that the deep participation of social capital can help: 1) improve the construction of rural waste collection and transportation system, promote resource recycling and open the growth space of domestic waste incineration; 2) Promote the coverage of rural water supply and drainage networks and promote the popularization of small decentralized sewage treatment equipment; 3) Promote the restoration of rural cultivated land, strengthen the treatment of the source of heavy metal pollution and environmental monitoring, and restore the market space or release of relevant sites.
Investment suggestion: the measures of ensuring and increasing energy supply at the national regular meeting will help thermal power enterprises get rid of the current operating difficulties by increasing coal production and stabilizing coal prices; The approval of new nuclear power units meets expectations, and the “Resurrection” of AP1000 stock projects can avoid potential asset impairment losses of relevant companies. Recommend China National Nuclear Power Co.Ltd(601985) , Shenergy Company Limited(600642) , China Yangtze Power Co.Ltd(600900) , China Three Gorges Renewables (Group) Co.Ltd(600905) , and Sdic Power Holdings Co.Ltd(600886) , Cgn Power Co.Ltd(003816) . “Beautiful countryside” is one of the important objectives of the Rural Revitalization Strategy. The new version of the guidelines is expected to improve the construction of rural water supply and drainage and garbage collection and transportation, and improve the level of resource recycling. Carefully recommend Beijing Geoenviron Engineering & Technology Inc(603588) , and pay attention to Grandblue Environment Co.Ltd(600323) , Csd Water Service Co.Ltd(603903) .
Risk tip: declining demand; Price reduction; Rising costs; Reduction of precipitation; Local financial pressure; Policy promotion lags behind
