“十五五”循环经济有望释放潜力，再生金属行业大有可为

Investment Rating - The investment rating for the environmental protection industry is "Positive" [2] Core Viewpoints - The "14th Five-Year Plan" emphasizes the development of a circular economy, which is expected to unlock potential in the recycling metal industry, making it a significant area for investment [2][3] - China's non-ferrous metal resources are unevenly distributed, with copper, aluminum, and nickel reserves being relatively scarce, leading to high import dependence [3][17] - The demand for copper is projected to increase significantly due to the growth of new energy sectors and data centers, with a potential supply gap of 30% by 2035 [26][29] - The production of recycled metals is crucial for achieving carbon neutrality, with significant energy and water savings compared to primary metal production [29][30] Summary by Sections Market Performance - As of November 21, the environmental protection sector declined by 6.02%, underperforming the broader market, which fell by 3.90% [3][10] - The water management and waste treatment sub-sectors also experienced declines of 4.50% and 9.76%, respectively [11][12] Industry Dynamics - The Ministry of Finance announced early allocation of the 2026 budget for clean energy development, supporting unconventional natural gas extraction [35] - The Ministry of Ecology and Environment issued a notice regarding carbon emission trading quotas for the steel, cement, and aluminum industries for 2024 and 2025 [36] - The production of ten major non-ferrous metals in China is expected to grow at an annual rate of around 5% [30][31] Investment Recommendations - The report recommends focusing on companies in the water and waste incineration sectors, which are expected to maintain stable profitability and positive cash flow [3][30] - Key recommended stocks include: Huanlan Environment, Xingrong Environment, and Hongcheng Environment, with additional attention to Wangneng Environment and Junxin Co. [3][30]