Xinda Securities·2025-06-23 13:56Investment Rating - The industry investment rating is "Positive" [2] Core Viewpoints - The report emphasizes the importance of focusing on Hong Kong's dividend assets in the context of a low-interest environment, which benefits financing costs for Hong Kong stocks, particularly in the water and waste incineration sectors [3][16] - The report highlights a significant reduction in capital expenditure in the industry, indicating a shift towards positive free cash flow and stable dividend payouts [3][16] - The report suggests that the "14th Five-Year Plan" will maintain high demand for energy conservation, environmental protection, and resource recycling, which is expected to sustain high industry prosperity [34] Market Performance - As of June 20, the environmental sector declined by 2.51%, underperforming the broader market, with specific declines in various sub-sectors such as water governance and waste incineration [3][9][10] - The report notes that the green electricity trading volume in China reached 220.945 billion kWh from January to May 2025, a year-on-year increase of 49.2% [26] Company Announcements - The report provides detailed financial forecasts and dividend rates for several companies, including: - Yuehai Investment: 2024 dividend payout ratio of 65%, dividend yield of 4.66% [18] - Beikong Water: 2024 dividend payout ratio of 91%, dividend yield of 6.41% [20] - China Water: 2024 dividend payout ratio of 30%, dividend yield of 6.1% [21] - China Everbright Environment: 2024 dividend payout ratio of 41.84%, dividend yield of 5.94% [22] - Green Power Environmental: 2024 dividend payout ratio of 73.39%, dividend yield of 9% [24] - Tianjin Chuangye Environmental: 2024 dividend payout ratio of 34%, dividend yield of 5.58% [25] Investment Recommendations - The report recommends focusing on quality operational assets in the water and waste incineration sectors, which are expected to benefit from stable earnings and cash flow [34] - Key recommendations include companies such as Hanlan Environment, Xingrong Environment, and Hongcheng Environment, with additional attention to companies like Wangneng Environment and Junxin Co. [34]