Core Viewpoint - In December, the CSI 300 index rose by 2.28%, while the public utility index fell by 2.46% and the environmental index decreased by 0.04%, with relative monthly returns of -4.74% and -2.32% respectively [2] Market Review - The public utility and environmental sectors ranked 27th and 19th among 31 primary industry categories in terms of growth [2] - Within the electricity sector, coal-fired power dropped by 5.17%, hydropower decreased by 3.08%, and new energy generation fell by 0.39% [2] - The water sector declined by 2.55%, and the gas sector saw a slight decrease of 0.18% [2] Important Events - The State Council issued the "Comprehensive Solid Waste Management Action Plan," aiming for significant improvements in solid waste management by 2030, including controlling historical waste stockpiles and increasing the annual comprehensive utilization of major solid waste to 4.5 billion tons [2] Investment Strategy - Public Utilities: - Coal and electricity prices are declining, maintaining reasonable profitability for coal-fired power; recommended companies include Huadian International and Shanghai Electric [4] - Continued government support for new energy development is expected to stabilize profitability; recommended companies include Longyuan Power and Three Gorges Energy [4] - Nuclear power companies are expected to maintain stable profitability; recommended companies include China National Nuclear Power and China General Nuclear Power [4] - High-dividend hydropower stocks are highlighted for their defensive attributes; recommended company is Yangtze Power [4] - Gas companies with capabilities in marine gas trade are recommended, such as Jiufeng Energy [4] - Companies advancing in clean energy equipment manufacturing, like Xizi Clean Energy, are also recommended [4] - Environmental Sector: - The water and waste incineration sectors are maturing, with improved free cash flow; recommended companies include China Everbright Environment and Shanghai Industrial Holdings [4] - The domestic scientific instrument market has significant potential for domestic substitution; recommended companies include Juguang Technology and Wanyi Technology [4] - The EU's SAF blending policy is expected to benefit the domestic waste oil recycling industry; recommended company is Shangaohuaneng [4] - The agricultural biomass power generation sector is seeing cost improvements due to falling straw prices; recommended company is Changqing Group [4]

Core Viewpoint - The report highlights a mixed performance in the market, with the Shanghai and Shenzhen 300 Index declining by 0.51%, while the public utility index rose by 3.45% and the environmental index increased by 1.49% [2] Market Review - The public utility and environmental sectors ranked 4th and 10th respectively among 31 primary industry categories, indicating a strong performance relative to other sectors [2] - Within the electricity sector, coal-fired power increased by 7.83%, hydropower by 2.30%, and renewable energy generation by 3.72%. The water sector rose by 5.55%, gas by 7.05%, and testing services by 1.53% [2][3] Important Events - As of October 12, 2025, multiple provinces have released documents related to the "Document No. 136" and initiated or completed competitive pricing for new energy incremental projects [2] Specialized Research - Green methanol, produced from renewable resources, significantly reduces carbon emissions during its production process. It must meet two key criteria: the hydrogen source must be green hydrogen, and the carbon source must be from biomass or carbon capture technologies [2] Investment Strategy - Recommendations include: - For coal-fired power, companies like Huadian International and Shanghai Electric are suggested due to stable profitability [3] - In the renewable energy sector, leading companies such as Longyuan Power and Three Gorges Energy are recommended, along with regional offshore wind power firms [3] - Nuclear power companies like China National Nuclear Power and China General Nuclear Power are expected to maintain stable earnings [3] - High-dividend hydropower stocks like Yangtze Power are highlighted for their defensive attributes [3] - In the gas sector, Jiufeng Energy is recommended for its capabilities in marine gas trading [3] - For the environmental sector, companies like China Everbright Environment and Zhongshan Public Utilities are suggested due to improving cash flows [4]