GOLDEN SUN SECURITIES·2025-12-22 03:19Investment Rating - The report maintains a "Buy" rating for key companies in the environmental sector, specifically for Huicheng Environmental, Gaoneng Environment, and Hongcheng Environment [4][7]. Core Insights - The report emphasizes the dual drivers of policy and technology in promoting solid waste recycling and carbon reduction in the industrial sector. It highlights the recent State Council meeting's focus on establishing a comprehensive governance system for solid waste management, aiming for reduction, resource utilization, and harmless disposal [1][11]. - The "National Energy Conservation and Carbon Reduction Technology Equipment Recommendation Directory (2025 Edition)" aims to enhance carbon reduction effectiveness through the promotion of advanced technology across the industrial chain, directly driving down carbon emissions [12][16]. - The report suggests focusing on companies benefiting from carbon neutrality, particularly those with technological advantages and project implementation capabilities, such as Huicheng Environmental and Gaoneng Environment [1][16]. Summary by Sections Investment Outlook - The macroeconomic environment is characterized by historically low interest rates, making high-dividend assets and growth-oriented companies attractive. The report recommends focusing on companies with strong cash flow and low valuations, particularly in the resource recycling sector [2][17]. Industry News - Recent regulatory measures include the issuance of guidelines for urban construction waste management in Hunan Province and an action plan for air pollution control in Xi'an [3][31]. - The environmental sector's performance was mixed, with the sector underperforming the broader market but outperforming the ChiNext index. Notable stock movements included significant gains for Xianhe Environmental and Guozhong Water, while Zhongdong Public Utilities and Yishida saw substantial declines [20][31]. Key Companies - Huicheng Environmental: Focuses on hazardous waste resource utilization and has a strong project pipeline, including breakthroughs in waste plastic recycling technology [18][19]. - Gaoneng Environment: Aims to become a leading environmental service provider with a robust project portfolio in hazardous waste management [18]. - Hongcheng Environment: Demonstrates steady growth with a diversified business model covering water treatment and solid waste disposal, alongside a strong dividend payout [19]. Market Performance - The environmental sector's performance was generally weak, with a decline of 0.84% compared to the Shanghai Composite Index's slight increase of 0.03%. The solid waste sub-sector showed a positive trend with a 1.96% increase [20][31].