Core Viewpoint - The report from Dongwu Securities indicates that the daily waste generation in the ASEAN 10 countries and India reaches 1.46 million tons, presenting a significant investment opportunity of approximately 250 billion yuan in waste incineration projects [1] Group 1: Market Potential - The overseas market for waste incineration is vast, with an estimated investment space of about 250 billion yuan in the ASEAN 10 countries and India [1] - Assuming a 50% incineration penetration rate, the daily incineration capacity could reach 496,900 tons, leading to an investment potential of approximately 248.5 billion yuan [1] Group 2: Revenue Analysis - High processing fees and electricity prices significantly enhance the revenue per ton for overseas projects, with projected revenues of 268 yuan per ton for domestic projects compared to 324 yuan, 413 yuan, and 582 yuan for projects in Kyrgyzstan, Vietnam, and Indonesia respectively [2] - The revenue increase percentages for these overseas projects are 21%, 54%, and 117% respectively, driven by high processing fees and electricity prices [2] Group 3: Indonesia's Policy and Economic Model - Indonesia is shifting its waste management model from local to national control, with a focus on a fixed electricity price of $0.20 per kWh for 30 years [3] - The country plans to build 33 waste-to-energy plants nationwide, with a total investment of approximately $5.6 billion, each capable of processing about 1,000 tons per day [3] - The first batch of waste-to-energy project tenders is set to launch by November 2025, covering seven regions with expedited approval processes [3] Group 4: Profitability Metrics - Economic assessments show that domestic projects yield a net profit margin of 27.71% and an ROE of 14.51%, while Indonesian projects can achieve significantly higher margins and returns [4] - For Indonesian old projects, the net profit margin is 27.71% with an ROE of 14.84%, while new projects can achieve a net profit margin of 30.23% and an ROE of 17.04% [4] Group 5: Cost Management Impact - The return on equity (ROE) for Indonesian projects is highly sensitive to cost management, with potential increases to 31.44% if the investment cost per ton is reduced from 1 million yuan to 700,000 yuan [5] - A decrease in financing costs by 1% can increase ROE by 1.82%, indicating the importance of managing both investment and financing costs [5] - If operational costs align with domestic levels, ROE could improve by 2.39 percentage points to 19.43% [6]

Market Overview - The Shanghai and Shenzhen 300 Index increased by 0.57%, the Utilities Index rose by 0.06%, and the Environmental Index grew by 0.27%, with relative weekly returns of 0.63% and 0.84% respectively [2] - Among the 31 primary industry sectors classified by Shenwan, the Utilities and Environmental sectors ranked 13th and 11th in terms of growth [2] Power Sector Performance - In the power sector, thermal power increased by 0.35%, while hydropower decreased by 1.76%, and renewable energy generation rose by 1.61% [2] - The water sector saw a decline of 0.28%, and the gas sector fell by 1.17% [2] Important Events - Shanxi Province announced a bidding mechanism for new energy projects for 2026, with a total bidding scale of 95.76 billion kWh, including 35.27 billion kWh for wind power and 60.49 billion kWh for solar power [3] - The bidding price range is set between 0.2 and 0.32 yuan/kWh, with a bidding capacity sufficient rate of 120% for both wind and solar [3] Water Pricing Trends - Water prices in China have remained low due to complex adjustment procedures, but over 26 cities are expected to raise water prices by 2025 due to increasing cost pressures on water supply companies [4] - The adjustment will likely affect residential, non-residential, and special industry water pricing simultaneously [4] Investment Strategies - In the utilities sector, coal and electricity prices are declining, which may help maintain reasonable profitability for thermal power companies, with recommendations for Huadian International and Shanghai Electric [5] - Continuous government support for renewable energy is expected to stabilize profitability in this sector, with recommendations for leading companies like Longyuan Power and Three Gorges Energy [5] - Nuclear power companies are anticipated to maintain stable profitability, with recommendations for China Nuclear Power and China General Nuclear Power [5] - High-dividend hydropower stocks are highlighted for their defensive attributes in a global interest rate decline environment, recommending Yangtze Power [5] - The gas sector is advised to focus on companies with capabilities in marine gas trading, such as Jiufeng Energy [5] Environmental Sector Insights - The water and waste incineration industries are entering a mature phase, with significant improvements in free cash flow, suggesting investment opportunities in the environmental sector [6] - The domestic scientific instrument market, exceeding $90 billion, presents substantial opportunities for domestic replacements, recommending companies like Juguang Technology and Wanyi Technology [6] - The EU's SAF blending policy is expected to increase demand for raw materials, benefiting the domestic waste oil recycling industry, with recommendations for Shangaohuaneng [6]

Investment Rating - The report maintains an "Outperform" rating for the public utility and environmental sectors [6][8]. Core Views - The report highlights that coal and electricity prices are declining simultaneously, which is expected to maintain reasonable profitability for thermal power companies. Recommendations include major thermal power companies such as Huadian International and Shanghai Electric [4][20]. - Continuous government policies supporting the development of renewable energy are anticipated to lead to stable profitability in renewable power generation. Recommended companies include Longyuan Power, Three Gorges Energy, and regional offshore wind power companies [4][20]. - The report notes that the growth in installed capacity and power generation will offset the downward pressure on electricity prices, with nuclear power companies expected to maintain stable profitability. Recommended companies include China Nuclear Power and China General Nuclear Power [4][20]. - The report emphasizes the defensive attributes of hydropower stocks in a global interest rate decline environment, recommending Jiangsu Yangtze Power as a stable and growth-oriented hydropower leader [4][20]. - The environmental sector is entering a mature phase, with significant improvements in free cash flow. The report suggests focusing on "utility-like investment opportunities" in the environmental sector, recommending companies such as China Everbright Environment and Shanghai Industrial Holdings [21]. Summary by Sections Market Review - The Shanghai Composite Index rose by 0.57%, while the public utility index increased by 0.06% and the environmental index by 0.27%. The relative returns for public utilities and environmental sectors were 0.63% and 0.84%, respectively [13][22]. Important Events - Shanxi Province initiated a bidding process for the 2026 incremental renewable energy project mechanism, with a total bidding scale of 9.576 billion kWh, including 3.527 billion kWh from wind power and 6.049 billion kWh from solar power. The bidding price range is set between 0.2 and 0.32 yuan/kWh [2][14]. Special Research - The report outlines that over 26 cities in China have raised water prices in 2025, with adjustments primarily between 10% and 30%. The report emphasizes the necessity of price adjustments due to rising costs faced by water supply companies [3][17][19]. Investment Strategy - The report recommends various companies across different sectors, including thermal power, renewable energy, nuclear power, hydropower, and environmental services, based on their expected performance and market conditions [4][20][21].

Investment Rating - The report maintains an "Outperform" rating for the public utility and environmental sectors [1][6][8]. Core Insights - The report highlights the launch of the 2026 incremental renewable energy project pricing mechanism in Shanxi Province, with a bidding range of 0.2-0.32 CNY/kWh and a total bidding volume of 9.576 billion kWh [2][14]. - It notes that over 26 cities in China have raised water prices in 2025, with adjustments typically ranging from 10% to 30% [3][17]. - The report emphasizes the importance of the carbon neutrality context, recommending investments in the renewable energy supply chain and integrated energy management [20]. Summary by Sections Market Review - The Shanghai Composite Index rose by 0.57%, while the public utility index increased by 0.06% and the environmental index by 0.27% [1][13]. - Within the electricity sector, thermal power increased by 0.35%, while hydropower decreased by 1.76% and renewable energy generation rose by 1.61% [1][22]. Important Events - The Shanxi pricing mechanism for renewable energy projects has a total scale of 95.76 billion kWh, with wind power at 35.27 billion kWh and solar power at 60.49 billion kWh [2][14]. - The bidding submission rate for both wind and solar power is set at 120% [2][14]. Investment Strategy - Recommendations include major thermal power companies like Huadian International and Shanghai Electric, as well as leading renewable energy firms such as Longyuan Power and Three Gorges Energy [4][20]. - The report suggests that nuclear power companies like China Nuclear Power and China General Nuclear Power will maintain stable profitability [4][20]. - It also highlights the defensive attributes of hydropower stocks in a global interest rate decline environment, recommending Changjiang Power [4][20]. Special Research - The report discusses the challenges in adjusting water prices due to regulatory processes, with many water supply companies facing profitability issues [3][17]. - It notes that the average annual cost increase for the water supply industry is about 3%, leading to a situation where some companies operate under a "low price + loss + government subsidy" model [3][17]. Company Profit Forecasts - The report provides profit forecasts and investment ratings for various companies, all rated as "Outperform," including Huadian International, Longyuan Power, and China Nuclear Power [8][21].

Investment Rating - The report maintains an "Outperform" rating for the public utility and environmental sectors [6][8]. Core Views - The report highlights the launch of the 2026 incremental renewable energy project pricing mechanism in Shanxi Province, with a bidding range of 0.2-0.32 CNY/kWh and a total bidding volume of 9.576 billion kWh, including 3.527 billion kWh from wind power and 6.049 billion kWh from solar power [2][14]. - It notes that over 26 cities in China have raised water prices in 2025, with adjustments typically ranging from 10% to 30%, driven by rising operational costs and the need for sustainable pricing mechanisms [3][17][19]. Summary by Sections Market Review - The Shanghai Composite Index rose by 0.57%, while the public utility index increased by 0.06% and the environmental index by 0.27% [13][22]. - Within the electricity sector, thermal power increased by 0.35%, while hydropower decreased by 1.76%, and renewable energy generation rose by 1.61% [13][23]. Important Events - The Shanxi pricing mechanism for renewable energy projects has a total scale of 95.76 billion kWh, with a bidding upper limit of 0.32 CNY/kWh and a lower limit of 0.2 CNY/kWh, effective for 10 years [2][14]. Investment Strategy - Recommendations include major thermal power companies like Huadian International and Shanghai Electric, as well as leading renewable energy firms such as Longyuan Power and Three Gorges Energy [4][20]. - The report suggests that the nuclear power sector will maintain stable profitability, recommending companies like China Nuclear Power and China General Nuclear Power [4][20]. - In the environmental sector, it advises focusing on companies with strong cash flow in water and waste management, such as China Everbright Environment and Shanghai Industrial Holdings [21]. Key Company Earnings Forecasts - Huadian International (600027.SH) is rated "Outperform" with an expected EPS of 0.46 CNY for 2024 and a PE ratio of 10.1 [8]. - Longyuan Power (001289.SZ) is also rated "Outperform" with an expected EPS of 0.75 CNY for 2024 and a PE ratio of 20.8 [8]. - China Nuclear Power (601985.SH) is rated "Outperform" with an expected EPS of 0.46 CNY for 2024 and a PE ratio of 20.9 [8].

Investment Rating - The report maintains a "Buy" rating for several companies in the environmental sector, including Huanlan Environment, Sanfeng Environment, and others, indicating a positive outlook for their stock performance [5]. Core Insights - The environmental industry is entering a critical phase of carbon reduction, with a focus on recycling and waste incineration. The demand for green energy and recycling industries is expected to rise significantly as China transitions to a dual control system for carbon emissions starting in 2026 [4][17]. - The introduction of the EU carbon tariff in 2026 is anticipated to increase the cost of exports from China, prompting companies to adopt greener practices to mitigate carbon emissions [4][17]. - High dividend assets in the environmental sector are expected to remain attractive in 2026, with companies like Guangda Environment and Huanlan Environment showing significant stock price increases in 2025 [4][5]. - The bio-diesel sector is experiencing a rise in UCO prices, which are expected to benefit companies involved in waste oil processing and bio-fuel production [19][25]. Summary by Sections Section 1: Market Performance - The environmental sector has shown strong performance in 2026, with water treatment, energy-saving, and recycling sectors leading the gains. Companies are diversifying into secondary businesses to enhance growth [11][14]. Section 2: Policy and Regulatory Developments - The report highlights the implementation of the "Solid Waste Comprehensive Governance Action Plan" aimed at reducing industrial solid waste and enhancing recycling efforts [33]. - The introduction of the carbon trading market and the EU carbon tariff are significant regulatory changes that will impact the industry [17][31]. Section 3: Company Performance and Recommendations - Key companies recommended for investment include Huanlan Environment, Shanghai Industrial Holdings, and others, which are expected to benefit from favorable market conditions and policy support [4][5]. - The report notes that the environmental sector's valuation is currently at a historical low, suggesting potential for future growth [45][52]. Section 4: Financial Analysis - The financial metrics for key companies indicate a positive outlook, with projected earnings per share (EPS) and price-to-earnings (PE) ratios suggesting undervaluation relative to historical performance [5]. Section 5: Market Trends - The report tracks the performance of various sub-sectors within the environmental industry, noting that energy-saving manufacturing and recycling have shown the most significant growth [49]. Section 6: Export and Pricing Trends - UCO prices have remained strong, with recent data showing a 6.1% increase compared to early 2025, indicating robust demand for bio-diesel feedstock [19][23]. Section 7: Carbon Market Activity - The carbon market has seen significant trading volumes, with recent data indicating a closing price of 78.50 CNY per ton, reflecting ongoing market activity and interest [31]. Section 8: Company Announcements - Recent announcements from companies like Dongjiang Environmental and Zhongyuan Environmental indicate strategic acquisitions aimed at enhancing operational capabilities and market positioning [42].

Group 1 - The company, Everbright Environment (00257.HK), announced that its board meeting will be held on March 20, 2026, to approve the annual performance for the year ending December 31, 2025, and to consider the distribution of a final dividend, if any [1] - The company has received approval from the China Interbank Market Dealers Association for the registration of multiple debt financing instruments [1]

（股份代號：257） 董事會會議日期 中國光大環境（集團）有限公司（「本公司」）董事會（「董事會」）宣佈，本公司董事會會 議將於二零二六年三月二十日（星期五）舉行，藉以批准（其中包括）本公司及其附屬公 司截至二零二五年十二月三十一日止年度之全年業績及其發佈，以及考慮派發末期股息 （如有）。 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容 而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 CHINA EVERBRIGHT ENVIRONMENT GROUP LIMITED 中國光大環境（集團）有限公司 （ 於 香 港 註 冊 成 立 之 有 限 公 司 ） 中國光大環境（集團）有限公司 梁妍鈺 公司秘書 香港，二零二六年一月十六日 於本公告日期，董事會包括：(i)兩名執行董事－王思聯先生（董事會主席）及欒祖盛先生 （總裁）；(ii)兩名非執行董事－康國明先生及瞿利女士；及(iii)三名獨立非執行董事－ 范仁鶴先生、李淑賢女士及張翔教授，JP.。 承董事會命 ...

Core Insights - The report highlights that the electricity reform continues to deepen, and the green methanol market is on the rise [1][3] - In 2025, coal prices remained low, benefiting thermal power companies, while hydropower and nuclear power sectors showed stable operations [4][6] - The report emphasizes the investment potential in various segments of the utility industry, including thermal, hydropower, nuclear, and green energy [4][6] Thermal Power - The comprehensive electricity price for thermal power is expected to remain stable, enhancing the sector's profitability [6] - Coal prices are projected to maintain a low and fluctuating trend in 2026, with improvements in revenue structure due to rising capacity prices [6][53] - The report suggests focusing on regions with smaller electricity price reductions and companies with nationwide layouts to capture stable profits [57][63] Hydropower - The report indicates that large hydropower projects have significant dividend value, especially under low-interest conditions [78] - The construction of hydropower stations in the Lancang and Yarlung Tsangpo rivers is expected to enhance operational flexibility and profitability [75][79] Nuclear Power - The approval of new nuclear power units has become normalized, with a significant number of units under construction and planned for future operation [82][87] - The report notes that the marketization of nuclear power is increasing, with a growing proportion of market transactions [90][93] Green Energy - The report discusses the recovery of green energy installations and the impact of electricity reform on investment value [4][6] - The demand for green methanol is expected to surge due to the International Maritime Organization's (IMO) net-zero framework, which aims for significant emissions reductions by 2050 [105][114] - The report highlights the strong demand for green methanol, with a projected annual demand of approximately 1,107.3 million tons from newly adopted methanol-fueled vessels [115] Waste Incineration - The waste incineration sector is entering a mature phase, with an increase in cash flow and potential for higher dividend payouts [116][121] - The report notes that several companies have committed to long-term dividend plans, indicating a positive outlook for returns [121][124] - The expansion into Southeast Asia is highlighted as a growth opportunity for waste incineration companies [124]

Core Viewpoint - The Ministry of Ecology and Environment of China has released the fifth batch of the national public open unit list for environmental facilities and urban sewage and waste treatment facilities, marking the first new list in nearly five years since 2020. Everbright Environment has successfully included 18 environmental projects, showcasing the company's commitment to green industry practices and corporate responsibility in line with the "Two Mountains" concept [1][3]. Group 1: Company Initiatives - Everbright Environment's 18 selected projects serve as benchmarks for the company's "open and share" philosophy and demonstrate the integration of technology in environmental protection [1][3]. - The company has opened 226 projects to the public since the second half of 2018, receiving approximately 220,000 visitors over three years, making it the earliest and largest enterprise in China to open environmental facilities to the public [3]. Group 2: Project Highlights - The Suzhou waste-to-energy project features China's first ecological exhibition hall within a waste incineration power plant, promoting environmental education [1]. - The Ninghai waste-to-energy project collaborates with other enterprises to enhance local tourism and environmental education [2]. - The Dongping waste-to-energy project successfully co-fires local agricultural waste with municipal waste, demonstrating practical environmental solutions [2]. - The Jiujiang waste-to-energy project has established an environmental education base, integrating education, science popularization, and industrial tourism [2]. - The Binhai sewage treatment project has innovated public engagement activities in collaboration with local government [2]. - The Rugao biomass direct combustion project has become a model for sustainable development and education in the Nantong area [2]. Group 3: Project List - The list of projects included in the fifth batch of national public open units features: 1. Tianjin Xiqing waste-to-energy project 2. Hebei Zhangjiakou waste-to-energy project 3. Heilongjiang Harbin waste-to-energy project 4. Jiangsu Yixing waste-to-energy project 5. Jiangsu Suzhou waste-to-energy project 6. Jiangsu Rugao biomass direct combustion project 7. Jiangsu Danyang waste-to-energy project 8. Zhejiang Ninghai waste-to-energy project 9. Zhejiang Shengzhou waste-to-energy project 10. Jiangxi Jiujiang waste-to-energy project 11. Shandong Zhucheng waste-to-energy project 12. Shandong Dongping waste-to-energy project 13. Shandong Binhai sewage treatment project 14. Henan Nanyang waste-to-energy project 15. Henan Xinyang waste-to-energy project 16. Henan Taikang waste-to-energy project 17. Hunan Xiangtan waste-to-energy project 18. Hunan Shaoyang waste-to-energy project [4][5].