Development status: there are great differences between urban and rural areas, and rural environmental protection infrastructure needs to be improved. China’s cities and counties have basically achieved household popularization in terms of centralized water and gas supply. The domestic waste and sewage treatment capacity is close to 100%, and the per capita greening situation continues to improve. Although the central government’s investment in rural environmental protection has increased year by year, the overall construction of rural environmental protection infrastructure is still significantly backward compared with cities and counties.
Prospect: ecological protection will be strengthened and policies will continue to work. A series of policies and regulations focusing on rural ecological and environmental protection, such as the law of the people’s Republic of China on the promotion of rural revitalization, have been issued one after another, and corresponding development plans have been put forward around water treatment, waste treatment, green agriculture and other sectors.
Water treatment: the growth space is nearly doubled, and small decentralized equipment has more market prospects. The 14th five year plan for soil, groundwater and rural ecological environment protection proposes that the treatment rate of rural domestic sewage will be increased to 40% by 2025. If we take 21.7% at the township level as the base, the growth space will nearly double. The rural areas in the central and western regions are widely distributed and the economic development is relatively backward. Decentralized sewage treatment is a better development direction, and the miniaturized decentralized sewage treatment equipment has more market prospects.
Garbage disposal: there is a vast world with great prospects. It is urgent to improve the collection and transportation system. Affected by factors such as imperfect collection and transportation system, remote areas and rural areas have a low harmless treatment rate, which is a potential incremental market. In 2020, the harmless treatment rate of domestic waste in built-up towns and townships will be 69.5% and 48.5% respectively. If it reaches the level of nearly 100% in cities, the corresponding market space will be 44% and 106% respectively. At present, the focus is to establish a rural waste collection and transportation system integrating urban and rural sanitation, and sanitation equipment will be the focus of the market.
Green agriculture: the restoration of cultivated land is also a pure land. It is imperative to save water and increase efficiency, and forestry carbon sequestration is essential. Among the soil remediation projects in 2020, agricultural land remediation accounts for about 10%, and there is much room for improvement. According to the 14th five year plan for building a water-saving society, during the 14th Five Year Plan period, China will add 60 million mu of high-efficiency water-saving irrigation area and create 200 water-saving irrigation areas. By 2025, 1.075 billion mu of high-standard farmland will be built in China, and the effective utilization coefficient of farmland irrigation water will reach 0.58. Considering the irreplaceable nature of carbon in some industries, it is necessary to hedge such emissions to achieve carbon neutralization by 2060. Therefore, the vigorous development of forestry carbon sink is essential.
Investment suggestion: the overall quality of China’s rural residential environment is not high. There are problems such as unbalanced regional development, imperfect basic living facilities and imperfect management and protection mechanism, which is still far from the requirements of agricultural and rural modernization and farmers’ yearning for a better life. Rural Revitalization takes “ecological livability” as one of the important tasks, and the rural environmental protection industry is expected to usher in a new period of development opportunities. For the environmental protection industry, the “recommended” rating is given for the first time. It is suggested to pay attention to Chengdu Xingrong Environment Co.Ltd(000598) , Csd Water Service Co.Ltd(603903) , Guangxi Bossco Environmental Protection Technology Co.Ltd(300422) in the water treatment section; It is recommended to pay attention to Grandblue Environment Co.Ltd(600323) , fulongma and Qiaoyin City Management Co.Ltd(002973) in the waste treatment section; The green agriculture sector suggests paying attention to Beijing Geoenviron Engineering & Technology Inc(603588) , Dayu Water-Saving Group Co.Ltd(300021) , Dongzhu Ecological Environment Protection Co.Ltd(603359) .
Risk warning: policy promotion is not as expected; Local financial pressure; Business model mismatch; Population reduction.
