GOLDEN SUN SECURITIES·2026-01-05 14:08Investment Rating - The report maintains a "Buy" rating for key companies in the environmental sector, specifically recommending Huicheng Environmental, Gaoneng Environment, and Hongcheng Environment [5]. Core Insights - The report highlights the significant policy support for the solid waste recycling industry, particularly through the "Recycling Materials Application Promotion Action Plan," which aims to enhance the supply capacity of recycled materials and establish a comprehensive recycling system by 2030 [1][18]. - The report emphasizes the establishment of three major regional action plans for environmental governance, focusing on the Beijing-Tianjin-Hebei, Yangtze River Delta, and Guangdong-Hong Kong-Macau regions, with specific targets for waste reduction and recycling by 2027 [20][26]. - The current macroeconomic environment, characterized by historically low interest rates, is favorable for investing in high-dividend and growth-oriented assets within the environmental sector [2][27]. Summary by Sections Section 1: Investment Views - The "Recycling Materials Application Promotion Action Plan" was officially released, aiming to enhance the supply of recycled materials and expand their application in key industries such as automotive and electronics [1][8]. - The Ministry of Ecology and Environment has issued three regional action plans for environmental governance, setting clear targets for waste reduction and recycling by 2027 [20][26]. - The environmental sector is currently experiencing low valuations and high growth potential, making it an attractive investment opportunity [27]. Section 2: Market Performance - The environmental sector outperformed the broader market, with a weekly increase of 0.24%, compared to a 0.13% rise in the Shanghai Composite Index [29]. - Key sub-sectors within the environmental industry showed varied performance, with energy-saving and monitoring sectors performing well, while water treatment faced slight declines [29]. Section 3: Key Announcements - The report outlines significant government initiatives aimed at promoting equipment upgrades and recycling, which are expected to drive growth in the environmental sector [40]. - The Ministry of Ecology and Environment has initiated a registration process for environmental monitoring service providers to enhance industry standards and quality [41].