Key recommendations: Miracle Automation Engineering Co.Ltd(002009) , Beijing Geoenviron Engineering & Technology Inc(603588) , Yutong Heavy Industries Co.Ltd(600817) , Beijing Sanlian Hope Shin-Gosentechnical Service Co.Ltd(300384) , Shandong Intco Recycling Resources Co.Ltd(688087) , Suzhou Shijing Environmental Technology Co.Ltd(301030) , Everbright environment, Dynagreen Environmental Protection Group Co.Ltd(601330) , Grandblue Environment Co.Ltd(600323) , China water, Jiangxi Hongcheng Environment Co.Ltd(600461) , Henan Bccy Environmental Energy Co.Ltd(300614) , Fujian Longma Environmental Sanitation Equipment Co.Ltd(603686) , China Resourcesand Environment Co.Ltd(600217)
Suggestions: Zhejiang Weiming Environment Protection Co.Ltd(603568) , Chongqing Sanfeng Environment Group Corp.Ltd(601827) , China Tianying Inc(000035) , conch entrepreneurship, Jiangxi Jovo Energy Co.Ltd(605090)
The China Association for environmental protection issued the “double carbon action plan (Exposure Draft)”, focusing on key industrial areas. The main objectives are as follows: by 2030, 1) the category system of ecological and environmental protection industry supporting key ecological and environmental protection work such as environmental pollution control, ecological protection and restoration, carbon emission reduction and industrial green development will be basically established, and the total annual operating revenue of pollution control industry will reach about 3 trillion yuan; 2) Cultivate and form dozens of large platform enterprises to solve regional ecological and environmental problems, hundreds of large and medium-sized backbone enterprises with strong comprehensive service ability, and thousands of “specialized, special and new” small and medium-sized enterprises.
The general office of the national development and Reform Commission and other organizations carried out the construction of demonstration cities for the recycling system of waste materials. The document requires that by 2025, 1) more than 1000 green sorting centers will be built; 2) The recycling capacity of nine major renewable resources, including waste steel, copper, aluminum, lead, zinc, paper, plastic, rubber and glass, reached 450 million tons; 3) About 60 large and medium-sized cities took the lead in building a basically perfect recycling system for waste materials.
Benchmarking the EU to see the development of China’s carbon market: the two core mechanisms are taking shape, the carbon price is rising for a long time, and CCER is bullish for a short time. For the resumption of the EU carbon market, the total amount control and MSR mechanism are the key to the carbon price balance. The development of China’s carbon market is similar to that of the EU, and has the prototype of the total amount control market regulation mechanism. At present, the transaction scale and covering industries have large room to improve, the carbon price is far lower than overseas, the double carbon target time is tight, the task is heavy, the total amount tightening drives the carbon price to rise for a long time, and the carbon market releases the demand of CCER, Previously, the recorded emission reduction of CCER in China totaled more than 50 million tons, which took four years. We expect to basically fulfill the contract, and the approval policy is expected to restart. We expect the supply scarcity price of CCER to rise in the near future.
Carbon neutralization investment framework and environmental protection industry mapping: build an investment framework from front-end energy substitution, middle-end energy conservation and emission reduction and back-end recycling, and provide effective institutional support for carbon trading. From the perspective of environmental protection, 1) energy substitution: adjust the front-end energy structure, and pay attention to the substitution demand of sanitation new energy equipment and renewable energy (waste incineration, etc.). 2) Energy conservation and emission reduction: promote industrial transformation in the middle end and pay attention to energy conservation management & Application of emission reduction equipment. 3) Recycling: promote the recycling of renewable resources such as waste classification, waste household appliances / cars and hazardous waste recycling. 4) Environmental consultation: the improvement of environmental management promotes the expansion of the demand for environmental consultation. 5) Carbon trading: encourage the development of CCER projects such as renewable energy (waste incineration / biomass utilization), methane utilization (sewage treatment / biogas utilization), forestry carbon sequestration, etc.
Focus on clean energy, circular economy and methane emission reduction under the China US cooperation framework and the deployment of double carbon action. 1) Deepen clean energy: [photovoltaic treatment] the prosperity of photovoltaic is rising, and the demand for process pollution treatment equipment is released: it is suggested to pay attention to Suzhou Shijing Environmental Technology Co.Ltd(301030) ; [sanitation electrification] sanitation new energy helps to reach the peak of carbon and increase Yutong’s share & profit leading verification advantage: it is recommended to pay attention to Yutong Heavy Industries Co.Ltd(600817) ; [waste incineration] the leader of waste incineration is always strong, the cash flow & profit is improved, the value is revalued, and Everbright environment is recommended; Excellent integration ability helps share expansion, and the cost reduction and efficiency increase expansion of large solid waste comprehensive industrial park can be expected: key recommendations: Grandblue Environment Co.Ltd(600323) ; It is recommended to pay attention to Zhejiang Weiming Environment Protection Co.Ltd(603568) , Dynagreen Environmental Protection Group Co.Ltd(601330) , Chongqing Sanfeng Environment Group Corp.Ltd(601827) . 2) Circular economy development: [hazardous waste recycling] recycling high-quality tob track, copying the advantages of Yuhong and recycling the leader of recycling, with emphasis on Beijing Geoenviron Engineering & Technology Inc(603588) ; [battery regeneration] power battery regeneration welcomes the long-term and high boom, and the leading players in the automotive aftermarket actively layout and enter the site, with emphasis on Miracle Automation Engineering Co.Ltd(002009) ; [recycled plastics] the leader in the scarcity of recycled plastics, the whole industrial chain & global layout, technological advantages, and the development of a blue ocean for plastic recycling, with emphasis on Shandong Intco Recycling Resources Co.Ltd(688087) ; It is suggested to pay attention to conch cement kilns for collaborative disposal of solid and hazardous wastes; 3) Increase the target of methane carbon reduction: [methane utilization] landfill gas is mainly composed of methane. The company is the leader of landfill gas power generation. The installed capacity will account for 20% in 2020. The profit elasticity of carbon emission reduction is large, and Henan Bccy Environmental Energy Co.Ltd(300614) is recommended; Pioneer in biogas production and utilization of organic waste, with emphasis on Welle Environmental Group Co.Ltd(300190) . [water revaluation] high dividend & accelerated growth, revaluation of the value of comprehensive public utility platform, with emphasis on Jiangxi Hongcheng Environment Co.Ltd(600461) ; It is suggested to pay attention to China’s water affairs.
Latest research: Miracle Automation Engineering Co.Ltd(002009) comments on 2021 performance forecast: high performance growth and accelerated development of lithium battery cycle sector; Soochow ESG special study 2 – Application in China: the letter Phi & evaluation system is taking shape, and ESG investment is in the ascendant.
Risk tip: the policy promotion is less than expected, the interest rate rises more than expected, and the fiscal expenditure is lower than expected.
