Core view
Keep our promise and firmly promote the realization of the “double carbon” goal. Recently, President Xi Jinping attended the 2022 World Economic Forum video conference and delivered a speech, emphasizing that China will unswervingly promote the construction of ecological civilization. Achieving carbon peak and carbon neutrality is not only the internal requirement of China’s high-quality development, but also China’s solemn commitment to the international community. China will abide by its promise and advance firmly. It is impossible to achieve peak carbon neutralization. China will work steadily and steadily to reduce traditional energy in an orderly manner in the process of promoting reliable replacement of new energy, so as to ensure stable economic and social development. China will actively carry out international cooperation on climate change and jointly promote the comprehensive green transformation of economic and social development. Green power, waste incineration, renewable resources and other fields are expected to benefit from the continuous promotion of the “double carbon” goal.
Cement prices fell and glass prices rose. Cement prices fell this week. The northern region continued to implement peak shifting and production restriction. Meanwhile, some southern provinces also began to stop kilns during peak shifting. The downward demand led to the decline of cement price. The clinker storage capacity ratio this week was 55.96%, up 0.39 percentage points from last week. The operating rate of cement mills decreased this week. The average operating load of cement mills in China was 25.26%, down 7.55 percentage points month on month. With the decline of cement price, the cement coal price difference decreased month on month, but it still increased compared with last year. It is suggested to pay attention to the leading enterprises in the cement area. The spot price of float glass rose slightly this week. Due to the high enthusiasm of hoarding goods before the festival in the middle and lower reaches, the inventory of glass production enterprises decreased. In terms of cost, the price of soda ash has increased to a certain extent, and the price of fuel has increased. The comprehensive profit of float glass industry showed a slight downward trend.
The current energy policy is conducive to stabilizing coal demand and supply expectations. In the long run, the coal supply is still limited, the bottleneck of supply growth is obvious, the enthusiasm of coal enterprises to invest in new mines is weak, and the economy is poor, the construction cycle of new production capacity is long and the approval procedures are complicated. The double carbon background determines that the coal supply will remain stable, and the Sanxi and Xinjiang regions with excellent resource endowment will be strong, Enterprises with layout in such areas will continue to benefit from the process of increasing resource concentration. The stability of coal price is very important to the healthy development of the whole industry. The periodicity of the industry is weakened and the profit stability is enhanced. The cash flow situation of coal enterprises in recent years is relatively good, which has also laid a solid foundation for some coal enterprises to develop in depth into new energy, new materials and industries; In the short and medium term, the task of “six guarantees and six stabilities” of macro-economy in 2022 is arduous. Phased and regional economic stimulus policies may further stimulate the enthusiasm of upstream resource products procurement and boost the investment sentiment and return on investment of the coal sector.
Investment suggestion: environmental protection and public utilities: it is recommended to pay attention to China Power (2380. HK), Huaneng Power International Inc(600011) (600011. SH), China Resources Power (0836. HK), China Three Gorges Renewables (Group) Co.Ltd(600905) (600905. SH), Henan Bccy Environmental Energy Co.Ltd(300614) (300614. SZ), Grandblue Environment Co.Ltd(600323) (600323. SH), Beijing Geoenviron Engineering & Technology Inc(603588) (603588. SH), Zhefu Holding Group Co.Ltd(002266) (002266. SZ), Shandong Intco Recycling Resources Co.Ltd(688087) (688087. SH). Building materials: recommended Guangdong Kinlong Hardware Products Co.Ltd(002791) (002791. SZ), Beijing New Building Materials Public Limited Company(000786) (000786. SZ), Beijing Oriental Yuhong Waterproof Technology Co.Ltd(002271) (002271. SZ), {300737. SZ), Zhejiang Weixing New Building Materials Co.Ltd(002372) (002372. SZ), Zhuzhou Kibing Group Co.Ltd(601636) (601636. SH), China Jushi Co.Ltd(600176) (600176. SH). Coal: recommended China Shenhua Energy Company Limited(601088) (601088. SH), Shaanxi Coal Industry Company Limited(601225) (601225. SH), Shanxi Coking Coal Energy Group Co.Ltd(000983) (000983. SZ), Shanxi Meijin Energy Co.Ltd(000723) (000723), Shan Xi Hua Yang Group New Energy Co.Ltd(600348) (600348).
Risk warning: the risk of sharp fluctuations in raw material prices; The risk that the downstream demand is less than expected; The risk that the landing effect of production restriction is not as good as expected; The risk that the policy strength is less than expected; The risk that the new capacity of the industry exceeds the expectation; The risk of sharp decline in coal prices under the pressure of policy regulation.
