Investment Rating - The report provides a positive outlook on the electricity and natural gas sectors, highlighting stable revenue mechanisms and growth potential in consumption and pricing [1][10]. Core Insights - The report emphasizes the importance of a refined capacity pricing mechanism for electricity generation, which aims to stabilize revenue and ensure fair compensation for various power sources [4][6]. - It notes that natural gas consumption is expected to grow, supported by favorable weather conditions and improved economic indicators, despite short-term price fluctuations [10][29]. Summary by Sections 1. Electricity: Improved Capacity Pricing Mechanism - The National Development and Reform Commission and the National Energy Administration have issued a notification to enhance the capacity pricing mechanism for electricity generation, addressing mismatches in supply and demand within the new power system [4]. - The new mechanism aims to ensure that different types of power generation, including coal, gas, and new energy sources, receive fair compensation based on their peak supply capabilities [6][7]. - The report highlights that the refined pricing structure will lead to more predictable revenue for power generation companies, reducing volatility in earnings [7]. 2. Natural Gas: Continued Growth in Consumption - The report indicates that the apparent consumption of natural gas in China is projected to grow by 0.1% in 2025, with December consumption reaching 38.57 billion cubic meters, a year-on-year increase of 1.9% [29]. - It notes that the recent cold weather has supported high natural gas prices, with the U.S. Henry Hub spot price at $7.18/mmBtu, while European prices remain elevated due to low inventory levels and geopolitical tensions [10][12]. - The report suggests that the natural gas sector will benefit from a combination of lower costs and improved pricing mechanisms, leading to a recovery in profitability for city gas companies [31]. 3. Investment Recommendations - For coal-fired power, companies like Guodian Power and Inner Mongolia Huadian are recommended due to their stable revenue sources [8]. - Hydropower companies such as Yangtze Power and State Power Investment Corporation are highlighted for their potential to improve profit margins through reduced capital expenditures [8]. - In the nuclear sector, China National Nuclear Power and China General Nuclear Power are suggested for their growth potential as new units are approved [8]. - The report also recommends focusing on integrated natural gas companies like ENN Energy and China Gas Holdings, which are expected to benefit from lower costs and increased sales [31].

Investment Rating - The report maintains a positive outlook on the power and gas sectors, indicating a favorable investment environment due to policy improvements and market dynamics [1]. Core Insights - The report highlights the recent improvements in the capacity pricing mechanism for power generation, which aims to stabilize revenue and enhance the profitability of various power sources [6][10]. - It notes a slight increase in natural gas consumption in 2025, with a projected growth of 0.1% year-on-year, indicating a stable demand outlook for the gas sector [32]. Summary by Sections 1. Power Sector: Capacity Pricing Mechanism Improvement - The National Development and Reform Commission and the National Energy Administration have issued a notification to enhance the capacity pricing mechanism for power generation, addressing mismatches in supply and demand within the new energy system [6]. - The new mechanism introduces differentiated pricing for various types of regulatory power sources, ensuring that their capacity value is adequately compensated [7]. - A unified compensation standard for peak capacity across different power sources is established, promoting rational investment and resource allocation in the power sector [8][10]. 2. Gas Sector: Continued Growth in Natural Gas Consumption - Natural gas consumption in China is expected to reach 385.7 billion cubic meters by December 2025, reflecting a year-on-year increase of 1.9% [32]. - The report emphasizes the impact of cold weather on gas prices, with global prices remaining high, particularly in the U.S. and Europe, which supports the profitability of gas companies [13][19]. - The report suggests that the gas sector will benefit from a combination of lower costs and improved demand, particularly for city gas companies, with recommendations for several key players in the market [34]. 3. Weekly Market Review - The report notes that the public utility, power, gas, and environmental sectors underperformed relative to the Shanghai and Shenzhen 300 index during the week of January 24 to January 30, 2026 [36]. 4. Company and Industry Dynamics - As of the end of 2025, the total installed power generation capacity in China reached 3.89 billion kilowatts, a year-on-year increase of 16.1%, with significant growth in solar and wind power installations [43]. - The report includes various company announcements, highlighting performance forecasts and operational updates from key players in the energy sector [44].

Investment Rating - The report maintains an "Outperform" rating for the environmental protection industry [2] Core Insights - The environmental protection industry is entering a significant performance period, with expectations for intensified carbon reduction efforts [1] - The year 2026 marks the transition from energy consumption control to carbon emission control, with substantial progress anticipated in carbon reduction initiatives [5] - The report highlights the importance of companies focusing on performance and increased dividends, with 61 environmental companies expected to release their 2025 performance forecasts [5] Summary by Sections 2025 Performance Forecast - 61 environmental companies have released performance forecasts, with 14 companies expecting significant positive growth, 4 companies experiencing declines, 8 companies turning losses into profits, and 35 companies reporting losses [12] - Notable performers include: - Anhui Instrument Technology: Expected net profit of 42-62 million CNY, a year-on-year increase of 191.52%-330.34% [12] - GaoNeng Environment: Expected net profit of 750-900 million CNY, a year-on-year increase of 55.66%-86.79% [12] - Yuehai Investment: Expected net profit growth of 43%, reaching nearly 4.5 billion HKD [13] Biodiesel and UCO Market - The average export price of UCO is expected to reach 7,742 CNY/ton in 2025, a year-on-year increase of 21.6% [19] - UCO export volume remains high, with a total of 2.7558 million tons exported in 2025, despite a 17% decline in biodiesel exports [19] - The price of UCO has shown a consistent upward trend, with the latest price reaching 1,075 USD/ton, a 9.1% increase from early 2025 [29] Policy and Market Tracking - The report tracks significant developments in carbon reduction policies, including the establishment of a dual control system for carbon emissions and energy consumption [33] - The carbon trading market has seen a total transaction volume of 862,100 tons, with a closing price of 79.00 CNY/ton as of January 30, 2026 [36] - Recent policies emphasize energy efficiency and carbon reduction in public institutions, aligning with the "14th Five-Year Plan" goals [38]

Investment Rating - The report maintains a "Positive" investment rating for the environmental sector, consistent with the previous rating [2]. Core Insights - The production of hydrogen fuel cell vehicles is expected to grow by 44% year-on-year in 2025, with the construction of zero-carbon parks accelerating hydrogen demand [2][19]. - The report highlights the government's commitment to promoting green hydrogen development and applications, with a focus on establishing zero-carbon factories in key industries by 2027 [19][30]. - The hydrogen energy sector is experiencing significant growth, with a projected increase in the scale of electrolyzer projects by 156% in 2025, indicating a robust demand for green hydrogen [26][30]. Market Performance - As of January 30, the environmental sector has underperformed the broader market, declining by 2.78%, while the Shanghai Composite Index fell by 0.44% [3][11]. - The report notes that various sub-sectors within the environmental industry have shown mixed performance, with water management and waste treatment sectors experiencing declines [14][17]. Industry Dynamics - The Ministry of Ecology and Environment, along with other departments, has issued guidelines for the management of ecological industrial parks, emphasizing low-carbon and high-quality development [3][31]. - Recent policies aim to establish a water-saving management system for industrial enterprises, encouraging the installation of online measurement facilities for water usage [33][34]. Investment Recommendations - The report suggests that the energy-saving and environmental protection sectors, along with resource recycling, are likely to maintain high levels of prosperity during the 14th Five-Year Plan period [47]. - Key investment recommendations include companies such as Hanlan Environment, Xingrong Environment, and Hongcheng Environment, with additional attention to companies like Wangneng Environment and Junxin Co [47].

Investment Rating - The industry investment rating is "Overweight" for both Utilities and Environmental sectors [8]. Core Insights - The carbon pricing market is undergoing a value reconstruction driven by both policy and market forces, with carbon prices expected to stabilize at 150-200 RMB/ton by 2030 [3][7]. - The green certificate market is currently underperforming, with prices at only 8% of the carbon price, indicating significant potential for value release [5][7]. - The upward pressure on electricity prices is anticipated from both carbon costs and green certificate revenues, with wholesale electricity prices projected to increase by 10% to 385 RMB/MWh [6]. Summary by Sections Carbon Price Trends - Carbon prices peaked at 98 RMB/ton by the end of 2024 but fell to a low of 38 RMB/ton in 2025 due to declining energy prices and increased renewable energy capacity [4]. - As of January 2026, carbon prices have stabilized at an average of 73 RMB/ton, supported by compliance demand from the power sector and the expansion of carbon markets in heavy industries [4]. Green Certificate Market - The average price of green certificates was 4.2 RMB per certificate in 2025 and increased to 5.5 RMB in 2026, still significantly lower than carbon prices [5]. - The low price of green certificates is attributed to the incomplete integration with the carbon market and insufficient market demand for green electricity [5]. Electricity Price Dynamics - Current carbon and green certificate prices are expected to push wholesale electricity prices from 350 RMB/MWh to 385 RMB/MWh, with further increases anticipated if carbon prices rise to 150-200 RMB/ton [6]. - If green certificate prices align with carbon prices, wholesale electricity prices could increase by 24-31% [6]. Future Outlook - The carbon market is expected to transition from "soft constraints" to "hard constraints" by 2027, with a gradual tightening of quotas and an increase in the proportion of paid allowances [7]. - Policies are being established to link the environmental value of green certificates with carbon reduction values, which may enhance the economic viability of green electricity [7].

Core Insights - The Chinese urban water supply industry is entering a mature phase, with total water supply expected to reach 704.88 billion tons in 2024, a year-on-year increase of 2.52% [1][13]. Industry Overview - Urban water supply is a vital municipal infrastructure system consisting of water source extraction facilities, water treatment plants, and distribution networks, adhering to principles of water source development and conservation [3]. - The industry is closely linked to urbanization, with the urbanization rate in China increasing from 58.52% in 2017 to 67% in 2024, driving demand for both domestic and industrial water [8]. Supply Scale - The total length of urban water supply pipelines in China has grown from 710,200 kilometers in 2015 to 1,199,500 kilometers in 2024, with a compound annual growth rate of 6% [9][10]. - The comprehensive production capacity of urban water supply is projected to be 34.418 million cubic meters per day in 2024, with a utilization rate of 56.11%, an increase of 0.08 percentage points year-on-year [11][12]. Demand Scale - The urban water user population in China increased from 451 million in 2015 to 564 million in 2023, with a compound annual growth rate of 2.85%. However, it is expected to slightly decline to 564 million in 2024 [15]. Competitive Landscape - The urban water supply industry features a diversified competitive landscape characterized by state-owned dominance, the rise of private enterprises, and foreign investment penetration. Major players include Beijing Enterprises Water Group, Beijing Capital Eco-Environmental Protection Group, and others [16][17]. Development Trends - The industry is shifting from a focus on quantity expansion to ensuring quality and safety in water supply, emphasizing comprehensive water quality monitoring and risk management [18]. - Business models are evolving from traditional water supply to integrated water service providers, offering a range of value-added services [19]. - Value creation is transitioning from cost control to leveraging data assets and smart operations, utilizing IoT and AI for enhanced efficiency and decision-making [20].

记者丨林典驰 编辑丨骆一帆 视频 丨 杨浩凯 深圳罗湖一场大型城市疤痕修复工程，刷屏网络。 这处名为玉龙填埋场的地方，正在进行迄今为止全国体量最大、全量开挖的垃圾搬迁治理工程。这座已经封场20年的垃圾山，正在开启新的使 命。 玉龙填埋场建于1983年，1997年停用，2005年底封场，总堆填垃圾约250万立方米，可填满1000个国际竞赛泳池 。随着城市建设的快速推进， 它当初所在的城市边缘已变成城市中心区。该修复工程已于2024年开启全量开挖搬迁治理，预计在2026年9月底完成。 21世纪经济报道记者1月25日在现场看到，原来高达110米的垃圾山已被完全削平，填埋场已被巨大的防尘布覆盖。距离开挖现场四五百米的地 方，已建起了垃圾筛分车间，6条巨型传送带正在高速运转。据央视报道，周边居民既看不到裸露的垃圾，也闻不到明显异味。 这些被挖出来的陈年垃圾，在经过筛分精细分类后，部分回收和无害化利用，轻质物将送到生活垃圾焚烧厂进行焚烧发电。 传统的卫生填埋方式因占用大量土地资源、易产生二次污染（如渗滤液、甲烷气体排放）等问题，"垃圾围城"在上世纪90年代一度成为许多大 中城市的严峻挑战。 但谁也没有想到，一场技术革命悄 ...

Investment Rating - The report maintains an "Overweight" rating for the environmental protection industry [1] Core Insights - The report emphasizes the growth potential in the waste incineration sector, particularly in overseas markets, with a projected investment scale of approximately 250 billion yuan for waste incineration in ASEAN countries and India [10][11] - The report highlights the significant increase in sales of new energy sanitation vehicles, with a year-on-year growth of 70.9% in 2025, indicating a strong trend towards electrification in the sanitation industry [20][30] - The report outlines a strategic focus for 2026, emphasizing value and growth resonance driven by dual carbon goals, with recommendations for companies that can leverage these trends [24][28] Industry Trends - **Waste Incineration Growth**: The report estimates a conservative increase of about 500,000 tons/day in waste incineration capacity in ASEAN and India, corresponding to an investment opportunity of around 250 billion yuan [10] - **Sanitation Equipment**: In 2025, the total amount for successful bids for unmanned sanitation equipment exceeded 12.6 billion yuan, with a year-on-year increase of 150% [17] - **Electric Vehicle Penetration**: The penetration rate of new energy sanitation vehicles reached 21.11% in 2025, up 7.67 percentage points year-on-year [30] Company Recommendations - **Key Recommendations**: The report recommends companies such as Longjing Environmental, Gao Neng Environment, and Sains for their strong growth potential in the waste incineration and sanitation sectors [4] - **Focus on Overseas Growth**: Companies like Weiming Environmental and Sanfeng Environment are highlighted for their potential to exceed expectations in overseas markets [15] - **Dividend and ROE Enhancement**: Companies such as Huanlan Environment and Green Power are noted for their strategies to enhance dividends and return on equity [15][24] Market Performance - **Sanitation Vehicle Sales**: The total sales of sanitation vehicles in 2025 reached 76,346 units, with a year-on-year increase of 8.82% [20] - **New Energy Vehicle Sales**: New energy sanitation vehicle sales reached 16,119 units, reflecting a significant increase of 70.9% year-on-year [20][30] - **Market Concentration**: The report notes that the market concentration for new energy sanitation vehicles is decreasing, with leading companies like Yingfeng Environment and Yutong Heavy Industry maintaining significant market shares [21][34]

Investment Rating - The report maintains an "Overweight" rating for the environmental protection industry [1] Core Insights - The report emphasizes the growth potential in waste incineration and the opportunities for companies to expand overseas, particularly in Southeast Asia and India, where there is a projected increase in waste incineration capacity [10][15] - The report highlights the significant increase in sales of new energy sanitation vehicles and the growth of unmanned sanitation projects, indicating a shift towards automation and electrification in the industry [17][20] - The 2026 strategy focuses on the dual drivers of value and growth, emphasizing the importance of marketization and efficiency improvements in the environmental sector [24][28] Industry Trends - Waste Incineration Growth: The report estimates a potential increase of approximately 500,000 tons/day in waste incineration capacity in ASEAN countries and India, corresponding to an investment scale of about 250 billion yuan [10] - Unmanned Sanitation Equipment: In 2025, the total amount of contracts for unmanned sanitation projects exceeded 12.6 billion yuan, with a year-on-year increase of over 150% [17] - New Energy Sanitation Vehicles: Sales of new energy sanitation vehicles increased by 70.9% in 2025, with a penetration rate of 21.11%, reflecting a growing trend towards electrification in the sanitation sector [20][30] Company Recommendations - Key companies recommended for investment include Longjing Environmental, Gao Neng Environment, Sains, and others, focusing on their growth potential in both domestic and international markets [4][15] - The report suggests that companies like Weiming Environmental and Sanfeng Environment are expected to benefit significantly from overseas expansion and high-value projects [15][24] - The report also highlights the importance of dividend increases and return on equity (ROE) improvements for companies such as Huanlan Environment and Green Power [15][24] Market Dynamics - The report notes that the profitability of waste incineration projects in Indonesia is significantly higher than in China due to favorable pricing and operational conditions [12][15] - The report indicates that the market for lithium battery recycling is improving, with rising metal prices and better margins for recycling projects [38][39]

Core Insights - The industrial solid waste treatment industry in China is in its early development stage, with low industrialization and market concentration. The market size is projected to grow from 686.84 billion yuan in 2016 to 983.78 billion yuan in 2024, with a compound annual growth rate (CAGR) of 5% [1][15] - By 2025, the market size is expected to reach approximately 1,089.92 billion yuan, driven by stricter environmental regulations, the implementation of circular economy strategies, and continuous innovation in treatment technologies [1][15] Industry Overview - Industrial solid waste treatment involves the systematic collection, professional transportation, and final disposal of solid and semi-solid waste generated during industrial production. The main goal is to achieve harmlessness, reduction, and resource recovery [2][4] - The industry includes various treatment methods such as physical, chemical, and biological processes, with applications in raw material utilization, incineration power generation, and pyrolysis gasification [2][6] Market Size and Growth - The market size of the industrial solid waste treatment industry in China is projected to grow from 686.84 billion yuan in 2016 to 983.78 billion yuan in 2024, with a CAGR of 5%. By 2025, it is expected to reach approximately 1,089.92 billion yuan [1][15] - The industrial solid waste treatment equipment and engineering market is also expanding, with a projected growth from 73.99 billion yuan in 2019 to 84.57 billion yuan in 2024, and an expected size of 86.86 billion yuan in 2025 [11] Policy Support - The Chinese government has implemented several policies to support the development of industrial solid waste treatment facilities, emphasizing the importance of harmless and resourceful treatment as essential infrastructure for urban development [7][8] - Key policies include the establishment of a waste recycling system by 2025 and the comprehensive management action plan for solid waste, which aims to enhance the management and tracking of industrial solid waste [7][8] Industry Chain - The industrial solid waste treatment industry chain includes upstream equipment manufacturing, midstream specialized collection and treatment, and downstream resource recovery and recycling [9][10] - Key equipment includes waste crushing, incineration, landfill, and recycling equipment, which are crucial for the effective treatment of industrial solid waste [9][11] Key Players - Major companies in the industrial solid waste treatment sector include Hanlan Environment, Greeenmei, Fuchun Environmental Protection, Weiming Environmental Protection, and others, which are competing based on technology integration, operational efficiency, and resource recovery depth [1][15][16] - Hanlan Environment has developed a comprehensive service capability for solid waste treatment, while Fuchun Environmental Protection has expanded its business model to include resource recovery and environmental monitoring [17][18] Challenges - The industry faces challenges such as insufficient treatment capacity, outdated technology, and non-standard management practices, which hinder effective waste treatment and increase environmental risks [19] - Many regions lack adequate treatment facilities, leading to an imbalance in treatment capacity across different areas [19] Future Trends - The industry is expected to evolve towards precision separation and high-value resource recovery, utilizing advanced technologies for better waste management [20][22] - There will be a shift from project-based operations to comprehensive lifecycle management and regional collaborative disposal, enhancing efficiency and reducing environmental risks [20][21] - The value proposition of industrial solid waste treatment companies will transform from being a cost center to creating measurable carbon reduction and sustainability solutions [22]