Investment Rating - The industry investment rating is "Recommended (Maintain)" [1] Core Viewpoints - The report emphasizes the importance of traditional environmental protection sectors with stable operational capabilities, which are expected to see a revaluation due to their profitability certainty. Additionally, new industries are emerging, creating new environmental governance demands, such as semiconductor waste gas treatment, leading to the rise of growth-oriented companies [27][28] - The report highlights the approval of a debt replacement policy by the National People's Congress, which is expected to alleviate accounts receivable pressure in the environmental sector [28] - Recommended companies include Hongcheng Environment, Hanlan Environment, and Weiming Environmental, with a suggestion to pay attention to Yongxing Co., Ltd. [28] Summary by Sections Important Data Tracking - From February 24 to February 28, the national carbon market saw a trading volume of 426,200 tons, an increase of 70.99% compared to the previous period. The closing price for carbon emission allowances was 89.56 yuan/ton, down 0.21% day-on-day and 0.38% compared to the previous period [3][7] - In the EU, the carbon emission allowance futures trading volume totaled 157 million tons, a decrease of 22.53% compared to the previous period, with an average settlement price of 70.77 euros/ton, down 2.96% [5] Industry News - Hubei Province issued the "2025 Provincial Ecological Environment Protection Work Points," aiming to achieve high water quality in major rivers and lakes, with a target of 91.7% for good water quality in surface water monitoring sections. The document also emphasizes the need to meet national air quality standards and ensure the safety of nuclear and radiation environments [23][24] Investment Suggestions - The report suggests focusing on companies with strong operational capabilities and cash flow pressures that may ease due to debt relief policies. It also recommends selecting companies in emerging environmental sectors that are expected to benefit from high growth potential [28] - The A-share environmental sector's PE (TTM) valuation is reported at 18 times, indicating a moderate valuation level [18]