The relevant systems of sewage treatment have been improved, and renewable energy has attracted more attention. 1. On April 2, the Ministry of ecology and environment issued the implementation plan for environmental impact assessment and pollutant discharge permit in the 14th five year plan. The plan aims to implement the objectives and tasks of ecological and environmental protection in the 14th five year plan, improve the source prevention system with the environmental impact assessment system as the main body, build a fixed pollution source supervision system with the pollutant discharge permit system as the core, and jointly promote high-quality economic development and high-level protection of the ecological environment. The plan will further clarify the main body responsible for pollutant discharge, standardize environmental impact assessment, fully implement the legal obligations of pollutant discharge of enterprises and institutions, and include the requirements for pollutant emission reduction in standard and non-standard areas in the pollutant discharge permit. The implementation of legal obligations and stricter industry supervision are conducive to improving the demand space of the sewage treatment industry and benefiting the head sewage treatment enterprises. 2. On April 18, Huang Runqiu, Minister of the Ministry of ecological environment, made a report of the State Council on the completion of environmental conditions and environmental protection objectives in 2021. The report shows that China has made solid progress in low-carbon pollution prevention and control in 2021; In 2022, the ecological environment work will give more prominence to precise pollution control, scientific pollution control and pollution control according to law, and deepen the battle of pollution prevention and control. In terms of sewage treatment, it is emphasized to organize and implement landmark campaigns such as the treatment of urban black and smelly water bodies, the protection and restoration of the Yangtze River, the ecological protection and treatment of the Yellow River and the comprehensive treatment of key sea areas. In terms of soil remediation, it is emphasized to deeply fight the battle of pure land protection, effectively control the risk of soil pollution, organize and implement the key battle of agricultural and rural pollution control, and strengthen the treatment of solid waste and new pollutants. It is recommended to pay attention to (1) Hongcheng water industry with attractive valuation and dividend yield. (2) The market share of soil remediation business is Beijing Geoenviron Engineering & Technology Inc(603588) .
This week’s carbon trading market: this week (4.18-4.22) the total trading volume of the national carbon market carbon emission quota (CEA) is 160.00 tons, with a total turnover of 960000 yuan. The highest transaction price is 60.00 yuan / ton and the lowest transaction price is 60.00 yuan / ton. The closing price on Friday (4.22) was 60.00 yuan / ton, the same as last Friday. As of April 22, 2022, the cumulative trading volume of the national carbon market carbon emission quota (CEA) was 190 million tons, with a cumulative turnover of 8.238 billion yuan.
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). 4. Testing, parallel magnetic materials and high revenue Sinosteel New Materials Co.Ltd(002057) .
Industry news: 1) Guangxi 2022 annual water pollution prevention and control work plan issued; 2) Sichuan Province issued the implementation opinions on deepening the battle of pollution prevention and control (Draft for comments); 3) The approval procedures for inter provincial transfer of solid waste (including hazardous waste) of Jiangxi Provincial Department of ecological environment (Draft for comments) were printed and distributed.
Plate Market Review: this week (4.18-4.22), the environmental protection sector performed well, outperforming the market and the gem; Public utilities performed well, outperforming the market and the gem. The Shanghai Composite Index fell by – 3.87%, the gem index fell by – 6.66%, environmental protection projects and services fell by – 3.72%, outperforming the Shanghai Composite Index by 0.15% and the gem by 2.94%; Public utilities rose by 0.30%, outperforming the Shanghai Composite Index by 4.17% and the gem by 6.96%. Monitoring (- 6.54%), atmosphere (- 6.15%), water treatment (- 4.78%), solid waste (- 3.63%), water operation (- 3.39%), energy saving (- 6.21%).
Risk tip: the environmental protection policy and supervision are less than expected, and the industry demand is less than expected.
