Environmental protection industry: affected by the epidemic, the growth rate of net profit in 22q1 declined. In 2021, SW environmental protection achieved an operating revenue of 309792 billion yuan, a year-on-year increase of 15.92%; The net profit attributable to the parent company was 25.807 billion yuan, a year-on-year increase of 21.30%. In the first quarter of 2022, SW environmental protection achieved an operating revenue of 65.433 billion yuan, a year-on-year increase of 3.06%; The net profit attributable to the parent company was 5.537 billion yuan, a year-on-year decrease of 19.49%. Affected by the epidemic in the first quarter of 22 years, the construction progress of some environmental protection projects slowed down and the capacity utilization rate of operating projects decreased, resulting in a decline in the growth rate of net profit.
Atmospheric Governance: as the traditional business enters the middle and late stage, the enterprise actively expands its business layout. In 2021, the operating revenue of SW atmospheric control sector was 32.869 billion yuan, with a year-on-year increase of 8.79%; The net profit attributable to the parent company was 1.339 billion yuan, a year-on-year increase of 322.77%. 2022q1sw atmospheric control sector achieved an operating revenue of 7.746 billion yuan, a year-on-year increase of 27.74%; The net profit attributable to the parent company was 191 million yuan, a year-on-year decrease of 42.83%. The transformation of traditional thermal power flue gas treatment has entered the middle and late stage. Atmospheric companies such as Beijing Spc Environment Protection Tech Co.Ltd(002573) , Fujian Longking Co.Ltd(600388) and other enterprises have arranged water treatment, solid waste treatment and new energy related businesses one after another to open up room for growth.
Water affairs and water treatment: the industry has entered a mature period and will develop steadily in the future. In 2021, the operating revenue of SW water and water treatment sector was 106535 billion yuan, a year-on-year increase of 16.38%; The net profit attributable to the parent company was 10.892 billion yuan, a year-on-year increase of 4.71%. 2022q1sw water and water treatment sector achieved an operating revenue of 22.9 billion yuan, a year-on-year increase of 5.19%; The net profit attributable to the parent company was 2.455 billion yuan, a year-on-year decrease of 18.31%. The industry has entered a mature stage and there are few new projects. In the future, with the improvement of sewage collection rate and sewage disposal price, the industry will maintain stable development.
Solid waste treatment: the performance of the sector is highly differentiated, and the performance of renewable resources enterprises is bright. In 2021, SW solid waste treatment achieved an operating revenue of 104497 billion yuan, a year-on-year increase of 26.76%; The net profit attributable to the parent company was 12.69 billion yuan, an increase of 82.04% year-on-year. 2022q1sw solid waste treatment sector achieved an operating revenue of 20.498 billion yuan, a year-on-year decrease of 8.97%; The net profit attributable to the parent company was 2.318 billion yuan, a year-on-year decrease of 22.51%. After the release of the plan related to the establishment of circular economy in the 14th five year plan, the sub policies on renewable resources in various fields have been issued one after another, the prosperity of the recycling industry has continued to improve, and the release of renewable resources demand is highly uncertain. Referring to the performance of 21 years and 22q1, relevant enterprises have shown rapid and sustained growth in performance.
Environmental protection equipment: some enterprises were less affected by the epidemic and still performed well in the first quarter. In 2021, SW environmental protection equipment achieved an operating revenue of 44.541 billion yuan, a year-on-year increase of 6.54%; The net profit attributable to the parent company was 2.978 billion yuan, a year-on-year decrease of 12.83%. 2022q1sw environmental protection equipment achieved an operating revenue of 10.748 billion yuan, a year-on-year increase of 13.59%; The net profit attributable to the parent company was 827 million yuan, a year-on-year increase of 24.23%. The environmental protection equipment sector dominated by equipment sales was relatively less affected by the epidemic, and still performed well in the first quarter.
Investment suggestions: focus on recommending the leading enterprises of recycling hazardous metal wastes Beijing Geoenviron Engineering & Technology Inc(603588) ( Beijing Geoenviron Engineering & Technology Inc(603588) . SH), rare earth recycling enterprises Jiangsu Huahong Technology Co.Ltd(002645) ( Jiangsu Huahong Technology Co.Ltd(002645) . SZ), lithium battery recycling enterprises Miracle Automation Engineering Co.Ltd(002009) ( Miracle Automation Engineering Co.Ltd(002009) . SZ), kitchen waste recycling enterprises Bece Legend Group Co.Ltd(000803) ( Bece Legend Group Co.Ltd(000803) . Sz), waste plastic recycling enterprises Shandong Intco Recycling Resources Co.Ltd(688087) ( Shandong Intco Recycling Resources Co.Ltd(688087) . SH).
Risk warning: the risk that the policy promotion is not as strong as expected; The risk that the project construction progress is less than expected; The risk that the demand for environmental governance is less than expected; The risk of decline in operating rate or capacity utilization caused by the epidemic; The risk of intensified industry competition.
