Boost the ecological protection and sustainable development of the Yellow River Basin and accelerate the construction of waste free cities. 1. On April 27, the national development and Reform Commission issued the implementation plan for supporting Ningxia to build a leading area for ecological protection and high-quality development in the Yellow River Basin. The plan adheres to the principle that water determines the city, land, people and production, and emphasizes specific measures such as vigorously promoting the economical and intensive utilization of water resources, accelerating the construction of a defense line against natural disasters, building an important ecological security barrier in the upper reaches of the Yellow River, vigorously promoting the synergy of energy conservation, pollution reduction and carbon reduction, accelerating industrial transformation and upgrading, establishing and improving cross regional cooperation mechanisms, and deepening reform in key areas. The subsequent implementation of the plan will help boost the ecological protection and sustainable development of the Yellow River Basin, and benefit environmental treatment industries such as sewage treatment and soil remediation. Recommended concerns: 1) Hongcheng water industry with attractive valuation and dividend yield; 2) Renewable energy operators with high installed capacity and clear planning. 2. On April 24, the Ministry of ecology and environment announced the list of “waste free cities” during the 14th Five Year Plan period, expanding from “11 + 5” pilot cities to 100 + cities and regions. The construction of “waste free city” aims to rapidly reduce the intensity of solid waste generation, significantly improve the level of comprehensive utilization and effectively ensure the harmless disposal capacity. It is expected to basically realize the “one network” of solid waste management information by 2025 and significantly improve the solid waste treatment system and treatment capacity. The expansion of the list of “waste free cities” will promote the effective management of solid waste in cities and regions and promote the development of solid waste treatment industry. It is recommended to pay attention to 1) Zhejiang Weiming Environment Protection Co.Ltd(603568) , which is leading in roe industry and has sufficient orders; 2) Excellent management Grandblue Environment Co.Ltd(600323) .
This week’s carbon trading market: this week (April 25-april 29), the total trading volume of the national carbon market carbon emission quota (CEA) is 939000 tons, with a total turnover of 533901 million yuan. The highest transaction price was 60.00 yuan / ton and the lowest transaction price was 58.00 yuan / ton. The closing price on Friday (4.29) was 58.80 yuan / ton, down 2.00% from last Friday (4.22). As of April 29, 2022, the cumulative trading volume of carbon emission quotas in the national carbon market was 190 million tons, with a cumulative turnover of 8.291 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) the Ministry of agriculture and rural areas issued the notice on comprehensive utilization of crop straw in 2022; 2) The Ministry of housing and urban rural development issued the notice of the general office of the Ministry of housing and urban rural development on further clarifying the relevant requirements for sponge city construction; 3) The Ministry of Finance and others issued the notice on organizing the application of pilot cities for government procurement to support green building materials and promote the improvement of building quality.
Plate Market Review: this week (4.25-4.29), the environmental protection sector performed poorly, losing the market and the gem; The public utilities sector performed well, outperforming the market and the gem. The Shanghai Composite Index fell by – 0.99%, the gem index fell by – 4.26%, environmental protection projects and services fell by – 5.17%, underperforming the Shanghai Composite Index by – 3.92% and the gem by – 0.91%; The decline of public utilities was – 1.23%, outperforming the Shanghai Composite Index by 0.02% and the gem by 3.04%. Monitoring (- 4.39%), atmosphere (- 4.34%), water treatment (- 6.98%), solid waste (- 5.91%), water operation (- 1.74%), energy saving (- 5.28%).
Risk tip: the environmental protection policy and supervision are less than expected, and the industry demand is less than expected.
