The 154 environmental protection and public utility stocks we tracked lost 0.49 percentage points to the Shanghai index this week and outperformed the Shanghai index by 20.76 percentage points since the beginning of the year. This week Zhejiang Tuna Environmental Science & Technology Co.Ltd(603177) , Jinneng Holding Shanxi Electric Power Co.Ltd(000767) , Jiangsu Jiangnan Water Co.Ltd(601199) rose 19.26%, 11.54% and 9.88% respectively; Cecep Wind-Power Corporation(601016) , Focused Photonics (Hangzhou) Inc(300203) , Guangzhou Development Group Incorporated(600098) decreased by 11.93%, 11.48% and 9.06% respectively, with poor performance.
The overseas acquisition of lithium resources by Chinese enterprises is not plain sailing, and the development of lithium resources in China will be accelerated.
On January 14, the Chilean Court suspended two lithium production contracts awarded by the government this week and accepted the protection appeal filed by Miguel Vargas, governor of Copiapo, and a group of Amara and dijita indigenous communities living on the salt flats of the Atacama Desert. On January 12, the Liberal government of Canada allowed China Zijin Mining Group Company Limited(601899) to bid for the lithium mining business of neolithium in Canada without starting a formal national security review. At present, although Zijin’s bid has been preliminarily approved by the government, it may still lead to formal review, resulting in less progress in resource acquisition than expected. Recently, the relevant person in charge of the Ministry of industry and information technology pointed out that in the next step, the Ministry of industry and information technology will formulate policies and measures to support the accelerated development of new energy vehicles, strengthen communication with Qinghai, Sichuan, Jiangxi and other provinces, coordinate and promote the acceleration of China’s lithium resource development. At present, countries have upgraded lithium to a national key strategic resource, and overseas acquisitions have become complex. The protection of upstream resources is very important for carbon neutralization in the transportation field, which is a great opportunity for the reshuffle of the global automobile market. China’s active development of China’s resources at this time is not just a simple problem of transferring profits to upstream resources, but a vital issue to ensure the supply security of China’s whole new energy vehicle industry chain.
In the face of the rapid development of downstream new energy vehicles and the obstacles to the overseas acquisition of upstream resources. The supply of lithium resources will continue to be in short supply in the next 2-3 years, and the strategic position of lithium resources will continue to improve. Accelerating the development of China’s lithium resources will help Chinese enterprises grasp the core pricing power of lithium resources and ensure that the share of interests will not be inclined to overseas on the premise of ensuring the supply of resources.
Revise the rules for mid – and long-term power transactions across regions and provinces in the south, and continue to promote the construction of the power market.
Recently, under the guidance of the national energy administration, Guangzhou electric power trading center revised and issued the rules for medium and long-term power trading across regions and provinces in the South (hereinafter referred to as the rules). The revision of the rules focuses on the modification and improvement of market management, transaction varieties, transaction organization, safety verification, contract management, settlement and deviation handling mechanism, policy convergence, risk prevention and control, etc. It is mainly reflected in the following six aspects: further shorten the transaction cycle and set up weekly and multi-day transactions; Further optimize the transaction organization process and clarify the agreement plan and market-oriented transaction organization sequence; Further refine the settlement mode and establish a time-sharing settlement mode of “daily settlement, monthly settlement and annual settlement”; Further improve the deviation handling mechanism and establish a deviation assessment mechanism with equal rights and responsibilities and compatible incentives; Further do a good job in policy convergence, and reserve interfaces for the construction of spot market and auxiliary service market, green power trading, power grid enterprise agency power purchase organization, etc; Further standardize the market order, enrich information disclosure, market monitoring and risk prevention and control, and standardize a fair and just market order. The promulgation of the rules has played a positive role in implementing the goals of carbon peaking and carbon neutralization, realizing the sharing, mutual assistance and optimal allocation of power resources on a larger scale, promoting the gradual increase of the consumption proportion of new energy and the efficient utilization of clean energy.
The price of thermal coal continued to rebound, and the downstream stock demand supported the high coal price.
The China Shipbuilding Industry Group Power Co.Ltd(600482) coal market is in an upward channel as a whole this week. In terms of origin, most of the coal mines in China’s main production areas are in normal production this week, and the demand for reserve storage before the Winter Olympics of some small and medium-sized power plants is released. At the same time, non power users such as chemical industry and building materials continue to maintain transportation. The sales situation of coal mines is good, which can maintain the balance between production and sales. There is no inventory. There is a queuing phenomenon of coal pulling vehicles in some coal mines in some areas, and the demand side has strong support for the price at the pit mouth. In terms of downstream demand, the inventory of China’s main power plants remained above the safety level this week, and the demand for reserve storage before the Spring Festival and Winter Olympics was released by some inland enterprises’ own power plants and chemical and other non power users, forming a strong support for the origin market. However, downstream users in coastal areas mainly purchase rigid demand this week, and there are signs of rising resistance to high prices in the second half.
The average price of LNG in China fell after rising, and the natural gas in the United States fluctuated upward.
The average price of LNG in China fell after rising this week. In terms of supply, the output of LNG plants in China decreased month on month this week, and the shipment of tank batch at the terminal decreased, among which the tank batch in Tianjin decreased significantly. In terms of demand, despite the recent impact of cold air, due to the upgrading of prevention and control in some regions, the downstream demand is limited. Considering that the Spring Festival holiday is approaching, many liquid plants reduce prices and discharge warehouses to stimulate shipments. At the same time, some industrial users will also face the limited shutdown caused by the Spring Festival holiday, and the demand for LNG point supply will also be limited. From the overall supply and demand situation, the LNG supply and demand may both decline next week. Under the influence of multiple factors such as public health events and Spring Festival holidays, the recent sluggish LNG consumption demand is not only difficult to reverse, but may continue further. The LNG market will gradually show the characteristics of light at the end of the year. It is expected that the subsequent LNG price may fall slightly.
Investment advice
At present, countries all over the world regard lithium resources as strategic mineral resources. It is very important to ensure the supply security of lithium metal minerals and establish a local supply chain. At the same time, with the continuous rise in the price of lithium concentrate, the profits of non integrated lithium salt processing enterprises are gradually thinning, and the profits have been largely moved to the resource side. A typical example is aokuang, which is highly dependent on China’s lithium salt processing plants. In the last cycle, it only earned 30% of the profits of the industrial chain, and 70% – 80% of the profits in this cycle have been transferred to aokuang, which just confirms aokuang’s expectation that the profits of this cycle and China’s lithium salt plants will open at the beginning of the year. Under the current background, the competitiveness of integrated enterprises with upstream resource guarantee and incremental resources is obviously stronger. It is recommended to pay attention to the ongoing Lijiagou spodumene mining and beneficiation project. In the future, it will join hands with Dongchuan energy investment to integrate and develop the lithium resources in Ganzi and ABA. The beneficiary targets include [ Youngy Co.Ltd(002192) ] which is promoting the 2.5 million T / a lithium ore beneficiation project in yuanyangba. The greenbushes mine will increase production in the next five years and can achieve a large output of [ Tianqi Lithium Corporation(002466) ] through OEM, In 2022 [ Qinghai Salt Lake Industry Co.Ltd(000792) ] with good performance of potash fertilizer and lithium salt is expected to be completed [ Yongxing Special Materials Technology Co.Ltd(002756) ] by the middle of this year.
In the process of accelerating the transformation of energy structure to green and low-carbon, the installed capacity of new energy is expected to grow rapidly, and new energy operators benefit from the increase of scale, the improvement of operation efficiency and the thickening of performance. We recommend paying attention to the new energy target of thermal power transformation [ Huaneng Power International Inc(600011) ]; At the same time, [ Cecep Solar Energy Co.Ltd(000591) ] and [ Cecep Wind-Power Corporation(601016) ] new energy operation power stations have benefited, and the Hong Kong stock targets have benefited from [Longyuan Power], [China Resources Power] and [China power].
Waste incineration is an industry encouraged and supported by national industrial policies. Promoting the integrated construction and professional operation of urban domestic waste treatment facilities is the development trend of the industry, and professional waste treatment service providers providing integrated investment, construction and operation services will occupy a competitive advantage. Under the policy background of “carbon neutralization and carbon peak”, the waste incineration power generation project will continue to benefit. We recommend paying attention to the leading waste incineration projects [ Dynagreen Environmental Protection Group Co.Ltd(601330) ] and [ Chongqing Sanfeng Environment Group Corp.Ltd(601827) ].
Risk tips
1) the implementation of carbon neutralization related policies is not as expected;
2) the demand for power coal and natural gas decreases seasonally;
3) major changes in power policy;
4) the development progress of lithium mine in Sichuan is less than expected.
