环保2025年度策略：资源循环多点开花，化债助力业绩修复

Investment Rating - The report maintains a "Buy" rating for key companies in the environmental sector, particularly those with strong technical capabilities and cash flow [8]. Core Insights - The environmental industry is experiencing a recovery in valuation, with the SW Environmental Engineering and Services III index showing a 6.8% increase over the past year, although it underperformed compared to the Shanghai Composite Index and the ChiNext Index [4][17]. - As of the third quarter of 2024, the environmental sector's revenue decreased by 1.5% year-on-year to CNY 249.59 billion, and net profit fell by 14.3% to CNY 18.97 billion [4][24]. - The dual carbon goals are being steadily advanced, with significant growth expected in the circular economy, particularly in hazardous waste resource recovery and lithium battery recycling [4][40]. - The report highlights the strong recovery potential of the environmental sector due to increased debt relief policies aimed at local governments, which are expected to improve cash flow and asset quality for environmental companies [4][79]. Summary by Sections Industry Fundamentals - The environmental sector's valuation is currently at a reasonable level, with a PE-TTM of 23.3x, positioned at the 55.4% historical percentile [4][17]. - Revenue and net profit have declined across the industry, with solid waste management leading in revenue growth at +10.7% year-on-year [4][24][26]. Circular Economy and Carbon Goals - The hazardous waste resource recovery sector is identified as a key area for achieving carbon reduction targets, with policies supporting the reuse of hazardous waste [4][40]. - The lithium battery recycling market is projected to grow significantly, driven by the increasing demand for electric vehicles [4][54]. - The report emphasizes the potential for growth in the plastic recycling sector, with a current recycling rate of around 30% in China [4][66]. Debt Relief Policies - The report discusses the recent debt relief measures, which include a CNY 60 trillion increase in local government debt limits aimed at alleviating hidden debt risks [4][95]. - Environmental companies are expected to benefit from improved cash flow and asset quality as a result of these policies, with a focus on sectors with high accounts receivable and bad debt provisions [4][104]. Investment Recommendations - The report recommends focusing on companies with strong technical capabilities and cash flow, such as high-energy environment and Huicheng Environmental [4][124]. - Companies with significant accounts receivable and potential for profit recovery, such as BWS and JG Technology, are highlighted as key investment opportunities [4][128][133].