Investment Rating - The report maintains a "Positive" investment rating for the clean power sector [8]. Core Insights - The "14th Five-Year Plan" emphasizes low-carbon requirements, aiming for a 17% reduction in carbon emission intensity during the "15th Five-Year Plan" period and a 25% increase in non-fossil energy consumption by 2030 [8][9]. - The report highlights the transition from "energy consumption dual control" to "carbon emission dual control," which will facilitate green electricity consumption [8][9]. - The construction of a new energy system is prioritized, focusing on the safe and orderly replacement of fossil fuels with non-fossil energy sources, including wind, solar, and nuclear power [9]. Summary by Sections Event Description - The report discusses the "15th Five-Year Plan" which outlines five key indicators focusing on carbon reduction and ecological protection [4]. Event Commentary 1. The plan promotes the safe and reliable replacement of fossil energy with non-fossil energy, implementing a ten-year doubling action for non-fossil energy [5]. 2. It aims to enhance the resilience and safety of the power system, optimizing national electricity flow and accelerating smart grid construction [5]. 3. By 2030, the plan sets a target for offshore wind power capacity to exceed 100 million kilowatts and nuclear power capacity to reach approximately 110 million kilowatts [5]. Investment Recommendations - The report suggests focusing on the clean power sector as a "turnaround opportunity" driven by policy catalysts, recommending companies such as Longyuan Power H, New天绿色能源 H, China Nuclear Power, and others [9].

Investment Rating - The investment rating for the public utility sector is "Positive" and is maintained [9] Core Insights - The "14th Five-Year Plan" emphasizes low-carbon requirements, aiming for a 17% reduction in carbon emission intensity during the "15th Five-Year Plan" period and a 25% increase in the share of non-fossil energy consumption by 2030. The focus has shifted from "dual control of energy consumption" to "dual control of carbon emissions," which will facilitate green electricity consumption [2][6] - The report highlights the need for a clean, low-carbon, safe, and efficient new energy system, proposing a ten-year action plan to significantly increase non-fossil energy sources. By 2030, the cumulative installed capacity of offshore wind power is expected to exceed 100 million kilowatts, and nuclear power capacity is projected to reach around 110 million kilowatts [12] - The report suggests that the collaborative "carbon reduction and green increase" planning will enhance the long-term narrative for green electricity and drive valuation recovery. It emphasizes the importance of policy catalysts in the clean power sector [12] Summary by Sections Event Description - The "15th Five-Year Plan" outlines five key indicators focusing on carbon reduction and ecological protection [6] Energy and Power - The plan aims to replace fossil fuels with non-fossil energy sources, promoting a diverse energy mix including wind, solar, hydro, and nuclear power. It also emphasizes the construction of clean energy bases and the efficient use of fossil energy [12] - A new power system will be established to enhance the resilience and efficiency of the electricity grid, with a target of 420 million kilowatts for west-to-east power transmission by 2030 [12] Investment Recommendations - The report recommends focusing on the clean power sector as a "turnaround opportunity" driven by policy support, highlighting companies such as Longyuan Power, New天绿色能源, China Nuclear Power, and others [12]

Investment Rating - The report indicates a positive outlook for the coal and electricity industries, emphasizing a transition towards cleaner and more efficient energy systems [4][12]. Core Insights - The 2026 government work report sets a clear direction for the coal and electricity sectors, focusing on carbon peak and new energy system construction, with a goal of balancing energy security and low-carbon transformation [4][12]. - The coal industry is expected to peak in consumption around 5 billion tons by 2028, with a focus on clean utilization and the transition from fuel to raw materials [5][7]. - The electricity sector is transitioning to a structure where new energy sources are predominant, with coal serving as a backup, aiming for over 50% of installed capacity to come from new energy by 2030 [6][11]. Summary by Sections Coal Industry - The coal sector will implement dual controls on consumption and production, with strict limits on new capacity and a focus on modernizing existing operations [5][7]. - There is a push for high-end coal chemical development and a shift towards sustainable practices, including ecological restoration and resource optimization [8]. - The industry is expected to see a concentration of quality production capabilities, with larger companies benefiting from stable revenue through long-term contracts and diversified operations [8][12]. Electricity Industry - The electricity sector is set to undergo significant changes, with a focus on scaling up new energy sources and enhancing grid infrastructure to accommodate higher proportions of renewable energy [9][10]. - The report highlights the need for a robust market mechanism to support the transition, including the establishment of capacity pricing for coal power and incentives for green electricity trading [10][11]. - The electricity market is anticipated to experience transformative changes, with opportunities and challenges for various players, particularly in renewable energy and grid management [11][12].

Group 1 - The National People's Congress (NPC) emphasizes the importance of green and low-carbon transformation, with suggestions from representatives focusing on green energy, digitalization, and innovation in mechanisms and industry upgrades [2][3] - The government work report highlights the need to develop a new power system, expand green electricity applications, and implement collaborative electricity infrastructure projects [3] - The introduction of the Ecological Environment Code marks a significant legal framework aimed at enhancing environmental protection and imposing stricter penalties for violations [5] Group 2 - The "14th Five-Year Plan" is identified as a critical period for achieving carbon peak goals, with a focus on comprehensive green transformation and energy system adjustments [6] - The lithium battery industry is experiencing rapid growth, with China holding over 70% of global production capacity, but faces challenges related to irrational competition and the need for regulatory frameworks [4] - The green fuel industry is highlighted as a new sector facing high research and development costs and infrastructure challenges, indicating a significant funding gap that needs to be addressed [7]

Market Overview - The SW public utility sector increased by 3.07%, ranking 4th among 31 SW primary sectors; the CSI 300 rose by 0.19%, the Shanghai Composite Index fell by 0.7%, the Shenzhen Component Index rose by 0.76%, and the ChiNext Index increased by 2.51% [4] - Among sub-sectors, thermal power rose by 1.97%, hydropower by 1.58%, photovoltaic power by 5.31%, wind power by 8.49%, comprehensive energy services by 1.99%, while gas fell by 0.07% [4] Price Trends - Domestic Qinhuangdao port 5500 kcal thermal coal price fell by 15 CNY/ton week-on-week; imported thermal coal prices showed divergence with Indonesian coal rising by 10 CNY/ton and Australian coal also increasing by 10 CNY/ton [5] - The average clearing price in Shanxi fell year-on-year, while the average clearing price in Guangdong rose year-on-year; nationwide agent purchase electricity fees decreased significantly due to lower thermal power annual contract prices and the entry of renewable energy [5] Key Events - The 15th Five-Year Plan emphasizes significant progress in building a beautiful China, achieving carbon peak goals, and establishing a clean, low-carbon, safe, and efficient new energy system [6] - The plan includes the construction of major hydropower and wind-solar integrated bases, offshore wind power bases, coastal nuclear power, and natural gas pipelines [6] - It also highlights the need for a price mechanism primarily determined by market supply and demand, and the implementation of dual control over carbon emissions [6] Industry Insights - The dual control of energy consumption and carbon emissions is expected to enhance the trend of green electricity consumption, driven by AI development and various government policies aimed at increasing renewable energy usage [7][8] - Policies include the "East Data West Computing" initiative and plans for green low-carbon development of data centers, which are expected to stimulate green electricity demand and streamline industry models [8] - Short-term pressures may arise in the "computing electricity" sector after significant price increases, but long-term industry trends remain positive [8]

Market Overview - A-shares collectively declined, with the Shanghai Composite Index down 0.81% to 4,095 points, and over 3,800 stocks fell amid cautious market sentiment[16] - Brent crude oil prices remained above $100 per barrel for the second consecutive trading day, with a rise of 3.1% on Friday, closing at $98.71 per barrel[27] - The U.S. stock market saw the S&P 500 drop 0.6%, marking its fourth consecutive day of decline, influenced by geopolitical tensions and rising oil prices[10] Economic Indicators - The U.S. GDP growth for Q4 was significantly revised down to 0.7% from 1.4%, indicating a slowdown in economic activity[30] - The Michigan Consumer Sentiment Index fell to 55.5, slightly below market expectations, reflecting consumer concerns amid rising inflation[30] Sector Performance - In the U.S., the technology sector led declines, with the Information Technology Index down 1.29%, while defensive sectors like Utilities rose by 0.94%[10] - In Hong Kong, the Hang Seng Index fell 0.98%, with notable declines in the technology sector, while energy stocks gained due to rising oil prices[12] Investment Insights - Nvidia's upcoming GTC 2026 conference is anticipated to provide insights into AI developments, with a target price of $300, reflecting potential growth in the AI sector[9] - Joyy Inc. reported strong earnings, exceeding market expectations, with a target price of $92, driven by robust advertising growth and a diversified business model[9] Currency and Commodity Trends - The U.S. Dollar Index rose by 0.6% to 100.36, reflecting a strengthening dollar amid rising oil prices and geopolitical tensions[26] - Gold prices fell by 1.2% to $5,061.7 per ounce, as market concerns about the economic impact of the Iran conflict weighed on demand for precious metals[27]

Core Viewpoint - The transition from energy consumption dual control to stricter carbon emission dual control is expected to impose stronger constraints on the supply side of the chemical industry, leading to a potential revaluation of the chemical sector [2][3][30]. Policy Transition - National policies are shifting from energy consumption dual control to emphasizing carbon emission total and intensity dual control, with the petrochemical and chemical sectors being key focus areas [4][5]. - By 2024, China's petrochemical and chemical industry is projected to emit approximately 1.6 billion tons of carbon, accounting for about 13% of the national total carbon emissions [2][8]. Supply Constraints - The effectiveness of carbon emission dual control in limiting new capacity in the chemical industry is expected to improve, particularly for sectors with high carbon intensity and low value creation per unit of carbon emissions, such as coal chemical, refining, and industrial silicon [3][20]. - The supply-side constraints are crucial for sustaining the industry's return on equity (ROE) and maintaining long-term prosperity [2][30]. Industry Cycle - The chemical industry has entered a new upward cycle, driven by reduced capital expenditures and supply-side policies aimed at curbing excessive competition [24][26]. - As of March 6, the price-to-book ratio (P/B) for basic chemicals was 2.94x, positioned at the 66th percentile since 2012, indicating a potential for valuation recovery [2][26]. Carbon Emission Focus - The chemical sector's carbon emissions are primarily from carbon dioxide, which accounts for about 80% of total emissions, with significant contributions from methane and other greenhouse gases [8][10]. - Specific sub-industries such as refining, methanol, nitrogen fertilizer, calcium carbide, and ethylene are identified as major contributors to carbon emissions within the petrochemical sector [8][10]. Future Outlook - The implementation of carbon emission dual control is anticipated to create a more robust framework for managing emissions, including local assessments and industry-specific monitoring mechanisms [7][20]. - The chemical industry is expected to benefit from a more favorable supply-demand balance, leading to improved profitability and valuation as supply-side constraints tighten [24][30].

Report Summary - **Report Date**: March 13, 2026 [1] - **Report Title**: How to View the Target of Carbon Emission Intensity Reduction during the 15th Five - Year Plan Period? - **Author**: Tang Huiting Report Industry Investment Rating No relevant information provided. Report's Core View The report focuses on two aspects based on the latest deployments in the government work report and the draft outline of the 15th Five - Year Plan: assessing the feasibility of China achieving the 2030 carbon emission intensity target on schedule, and comprehensively judging the specific year of China's "carbon peak" and its impact on the subsequent distribution of emission reduction pressure [2]. Summary by Directory 1. Carbon emission intensity has the risk of deviating from the target, and the quantitative target for 2035 is set prudently - **1.1 The intensity target of the 15th Five - Year Plan is insufficient to support China in achieving the 2030 intensity target** [5] - **1.2 From the 2035 NDC, see the adjustment direction of China's medium - term emission reduction path** [5] 2. Forecast of China's peak - reaching year and outlook on emission reduction pressure during the 16th Five - Year Plan - **2.1 Forecast of the year when carbon dioxide emissions peak: Based on the intensity target** [5] - **2.2 Realistic basis for the peak of greenhouse gas emissions: Based on the trend of fossil energy consumption** [5] - **2.3 Forecast of the year when greenhouse gas emissions peak: Based on activity data** [5] - **2.4 Comprehensive judgment** [5]

Investment Rating - The industry investment rating is "Hold" [2] Core Viewpoints - The dual carbon policy is expected to strengthen the supply logic of the building materials industry, leading to potential improvements in profitability from historical lows [5][34] - The cement industry is a key focus for carbon reduction, with an estimated clinker production of approximately 1.1 billion tons in 2025, contributing to about 8% of national carbon emissions [34] - The glass industry is also under scrutiny, with significant carbon emissions expected to be managed through cleaner fuel transitions and potential inclusion in carbon markets by 2027 [34] Summary by Sections Transition from Energy Consumption Control to Carbon Emission Control - The transition from "energy consumption control" to "carbon emission control" is expected to enhance the effectiveness of carbon reduction efforts [19][20] - The 14th and 15th Five-Year Plans emphasize the importance of reducing carbon emissions, with a target of a 17% reduction in carbon emissions per unit of GDP by 2025 [23][26] Cement Industry - The dual carbon policy is anticipated to lead to continuous improvements in the supply side of the cement industry, with administrative measures expected to force non-compliant and inefficient production capacities out of the market [34] - The carbon market is set to include the cement industry by 2025, with a gradual tightening of carbon quotas expected post-2027, which will increase costs for less efficient producers [35][36] Glass Industry - The glass industry is currently undergoing transformations to phase out outdated production capacities through cleaner fuel initiatives, with expectations of stricter environmental policies in the future [34] - The glass sector is projected to be included in carbon market regulations by 2027, which will further drive the exit of inefficient production capacities [34] Investment Recommendations - The report suggests that the dual carbon policy will enhance the supply-side logic of the building materials industry, with leading companies expected to benefit from improved profitability as supply conditions optimize [5][34] - Key companies to watch in the cement sector include Huaxin Cement, Conch Cement, and China National Building Material, while in the glass sector, focus on companies like Xinyi Glass and Fuyao Glass [5][34]

Investment Rating - The report maintains a "Recommend" rating for the chemical industry, highlighting the fundamental support from the dual carbon policy [8]. Core Insights - The approval of the "Ecological Environment Code" by the National People's Congress is expected to transform carbon emission constraints from administrative guidance to legal responsibilities, significantly impacting the supply logic and capital expenditure behavior in the chemical industry [12][14]. - The dual carbon initiative is gaining unprecedented attention from provincial leaders, with a notable increase in focus since September 2025, suggesting a stronger push for carbon control during the 14th Five-Year Plan [19]. - High carbon intensity sectors, such as ammonia fertilizer and coal chemical industries, are likely to face stricter capacity constraints, marking the end of growth models based on capital expenditure expansion [30][31]. - Capital expenditure in the petrochemical and basic chemical sectors has shown a trend of contraction since 2024, indicating a decline in supply expansion willingness [34]. Summary by Sections 1. Legislative Direction Supporting Dual Carbon - The "Ecological Environment Code" aims to provide a comprehensive legal framework for green and low-carbon development, enhancing the authority and enforceability of dual carbon targets [12][13]. - The code outlines responsibilities for carbon footprint management and market regulation, indicating a shift towards legally binding carbon reduction obligations for major emitters [14][15]. 2. Investment Recommendations - The report suggests focusing on three main lines of investment: 1. Leaders in the oil-based chemical industry, such as Hengli Petrochemical and Sinopec, which are expected to benefit from stricter capacity approvals and improved industry dynamics [40]. 2. Low-emission leaders in the coal-based chemical sector, including Baofeng Energy and Luxi Chemical, which are positioned to enhance market share and profitability amid supply stabilization [41]. 3. Low-carbon and high-value leaders in other segments, such as fluorine chemicals and polyurethane, which are anticipated to thrive under enhanced carbon constraints [41].