Key investment points:
Market review: as of May 20, 2022, the power and utility index rose by 1.44% in the week, underperforming the CSI 300 index by 0.79 percentage points, ranking 21st among the 30 industries of CITIC; The power and Utilities Index rose 5.68% in the month, outperforming the CSI 300 index by 4.15 percentage points and ranking 12th among the 30 industries of CITIC; The power and utilities index has fallen 13.88% year to date, outperforming the CSI 300 index by 3.58 percentage points and ranking 13th among CITIC's 30 industries.
As of May 20, 2022, the sub sectors of power and public utilities had mixed gains and losses in the week, including other power generation sectors, environmental protection and water sector, heating or other sectors, thermal power sector, gas sector, hydropower sector and power grid sector, which rose by 3.95%, 2.56%, 1.33%, 1.20%, 0.38%, 0.04% and 0.67% respectively.
Among the top ten stocks that rose in the week, Shanghai Nenghui Technology Co.Ltd(301046) , Focused Photonics (Hangzhou) Inc(300203) and Poten Environment Group Co.Ltd(603603) 603 ranked among the top three in power and public utilities, up 27.40%, 21.58% and 16.67% respectively. Among the top ten stocks that fell in the week, Hunan Development Group Co.Ltd(000722) , Datang Huayin Electric Power Co.Ltd(600744) and aibulu fell by 20.16%, 8.97% and 8.33% respectively.
In terms of Valuation: as of May 20, 2022, the PE (TTM) of power and utilities sector was 20.29 times; In terms of sub sectors, thermal power sector PE (TTM) is 22.63 times, hydropower sector PE (TTM) is 20.78 times, other power generation sector PE (TTM) is 24.47 times, power grid sector PE (TTM) is 30.95 times, gas sector PE (TTM) is 16.93 times, heating or other sector PE (TTM) is 16.89 times, and environmental protection and water sector PE (TTM) is 16.56 times.
Industry weekly view: Utilities Sector: as of May 20, 2022, the average price of q5500 thermal coal in Qinhuangdao port in that week was 1205 yuan / ton, the same as the previous week. On May 20, the national development and Reform Commission made a clear definition of thermal coal, laying a solid foundation for the implementation of the policy of regulating the price of thermal coal. We believe that since this year, the government has continuously issued policies to strengthen the regulation and supervision of coal prices. With the gradual implementation of relevant policies and measures, coal prices are expected to operate within a reasonable range, and the performance of thermal power enterprises is expected to usher in marginal improvement. It is suggested to pay attention to Huaneng Power International Inc(600011) ( Huaneng Power International Inc(600011) ), Datang International Power Generation Co.Ltd(601991) ( Datang International Power Generation Co.Ltd(601991) ), Huadian Power International Corporation Limited(600027) ( Huadian Power International Corporation Limited(600027) ), Gd Power Development Co.Ltd(600795) ( Gd Power Development Co.Ltd(600795) ), Zhejiang Zheneng Electric Power Co.Ltd(600023) ( Zhejiang Zheneng Electric Power Co.Ltd(600023) ), Guangdong Electric Power Development Co.Ltd(000539) ( Guangdong Electric Power Development Co.Ltd(000539) ). Environmental protection: the national development and Reform Commission recently issued the "14th five year plan" for bioeconomy development. The plan proposes to promote the development of bioenergy and bioenvironmental protection industries. Relevant measures include the construction of industrial parks with biomass cogeneration, biomass briquette fuel and other renewable energy as the main energy; Support counties where conditions permit to carry out clean heating with biomass energy instead of coal, steadily develop urban domestic waste incineration and cogeneration, and promote clean heating with biogas, biomass briquette and other biomass energy. We believe that China's accelerated development of bioeconomy is expected to increase the demand for biomass power generation and cogeneration. We suggest paying attention to the targets of waste incineration power generation Zhejiang Weiming Environment Protection Co.Ltd(603568) ( Zhejiang Weiming Environment Protection Co.Ltd(603568) ), Chongqing Sanfeng Environment Group Corp.Ltd(601827) ( Chongqing Sanfeng Environment Group Corp.Ltd(601827) ), Dynagreen Environmental Protection Group Co.Ltd(601330) ( Dynagreen Environmental Protection Group Co.Ltd(601330) ).
Risk warning: policy promotion is not as expected; Economic development is less than expected; The construction progress of the project is less than expected; Product price fluctuation risk; Raw material price fluctuation risk, etc.
