Investment Rating - The report maintains a "Recommended" rating for companies with significant biodiesel or raw material production capacity, including Zhuoyue Xinneng, Jiaao Environmental Protection, Shanggao Huaneng, Haineng Kexin, and Langkun Environment [4][5]. Core Insights - The biodiesel market is expected to see increased demand and raw material supply due to the cancellation of export VAT refunds on raw materials, which will drive growth in the biodiesel sector [4]. - Recent agreements, such as the one between Cathay Pacific and Sinopec for SAF procurement, indicate a positive trend in the adoption of domestic SAF, enhancing the supply chain for biodiesel [3]. - The average prices for domestic waste cooking oil and gutter oil have increased, with waste cooking oil priced at 6640 CNY/ton and gutter oil at 6180 CNY/ton, reflecting a stable export outlook for UCO to Europe, the US, and Southeast Asia [2][4]. Summary by Sections Price Trends - The report notes a week-on-week increase in external HVO/SAF prices, with SAF at 1884.5 USD/ton (up 4.87%) and HVO at 1960.75 CNY/ton (up 3.46%) [1]. - Domestic price differences for biodiesel exports to Europe have reached 2539 CNY/ton, showing a weekly increase of 163 CNY/ton [1]. Export Expectations - The report anticipates a significant rise in China's HVO/SAF export volumes for May, with estimates nearing 40,000 tons, supported by rising external prices [3]. - The report highlights that the domestic HVO/SAF factories are maintaining strong procurement levels, indicating robust market demand [2]. Company Performance Forecast - The earnings per share (EPS) and price-to-earnings (PE) ratios for key companies are projected, with Zhuoyue Xinneng expected to have an EPS of 3.16 CNY in 2025 and a PE of 14 [5].

Investment Rating - Maintain "Buy" rating for the environmental protection industry [1] Core Insights - The acceleration of unmanned sanitation bidding indicates rapid industry development and technological iteration [8] - Decrease in capital expenditure in waste incineration leads to increased dividends, while improvements in heating and IDC enhance ROE and valuation [9] - Water utility operations show steady growth and high dividends, with water price reforms reshaping growth and valuation [12] Summary by Sections Industry Trends - Unmanned sanitation bidding is accelerating, with a procurement project for 100 small autonomous cleaning vehicles announced, budgeted at 28.6 million yuan [8] - The waste incineration sector is seeing a decline in capital expenditure, leading to improved free cash flow and increased dividends [9] - The water utility sector is experiencing stable growth, with a projected revenue of 655 billion yuan in 2024, and a net profit of 112 billion yuan, reflecting a 27% increase [12] Key Recommendations - Recommended companies include: Huanlan Environment, Green Power, Yongxing Co., and others for their strong dividend performance and growth potential [4] - Focus on companies like Yuehai Investment and Xingrong Environment for their robust cash flow and dividend commitments [12] Equipment and Technology - The penetration rate of new energy sanitation vehicles increased by 6.14 percentage points to 14.55% in the first four months of 2025, with sales of 3,570 units, a 73% year-on-year increase [21][22] - The market for bio-diesel remains challenging, with prices stable and profits under pressure due to rising raw material costs [36] Financial Performance - Companies like Junxin Co. and Green Power are expected to increase their cash dividends significantly in 2024, with Junxin's cash dividend projected at 507 million yuan, a 37% increase [9] - The water utility sector is set to benefit from recent price reforms, with Guangzhou implementing significant price increases for residential water [13][14]

Investment Rating - The report maintains an "Increase" rating for the environmental protection industry [1] Core Viewpoints - The national green electricity direct connection policy opens up cooperation space for waste incineration power generation and IDC [9][12] - The solid waste sector is expected to increase dividends and improve ROE through heat supply and IDC expansion [1][14] - The industry is entering a mature phase, leading to reduced capital expenditures and improved free cash flow, which enhances dividend payouts [14][17] Summary by Sections Industry Trends - The environmental protection sector is experiencing a decline in capital expenditures, leading to a significant improvement in free cash flow and increased dividends [14] - The waste incineration sector is seeing a trend towards cost reduction and efficiency improvements, which enhances ROE [14][15] Key Recommendations - Strongly recommended companies include: Huanlan Environment, Green Power, Yongxing Co., China Everbright Environment, Junxin Co., Yuehai Investment, and others [1] - Companies to watch include: Lian Tai Environmental Protection, Wangneng Environment, and Beikong Water Group [1] Policy Tracking - The green electricity direct connection policy requires new projects to have over 80% green electricity usage, which is expected to drive the integration of waste incineration power generation with data centers [12][13] - The policy aims to facilitate the supply of green electricity to high-energy-consuming industries, enhancing economic efficiency and stability [10][12] Financial Performance - The water service sector is projected to see stable growth and high dividends, with water price reforms expected to reshape growth and valuation [17][19] - The report highlights specific dividend payouts for companies like Junxin Co. (5.07 billion CNY), Green Power (4.18 billion CNY), and Huanlan Environment (6.52 billion CNY) for 2024 [14][17] Market Performance - The environmental protection and public utilities index rose by 3.53%, outperforming the broader market indices [50] - Notable stock performances include Yuhua Tian (up 55.7%) and Boschke (up 42.56%) [51]

Macro and Strategy - The macroeconomic review indicates that the PMI data for May shows improvement, with the impact of tariffs temporarily alleviated and resilience in the consumer services sector [3][8] - The high-tech manufacturing macro report reveals that the National Securities weekly high-tech manufacturing diffusion index remains flat, indicating mixed performance across various sectors [3][9] - The macroeconomic report highlights weak high-frequency growth indicators, with a rebound in export chains and food prices [10][11] Industry and Company - The investment strategy for the petrochemical industry in June 2025 focuses on potassium fertilizers, allulose, refrigerants, pesticides, and biodiesel as key investment directions [3][26] - The chemical industry report notes a significant increase in air conditioning production in Q2, with prices of third-generation refrigerants continuing to rise [3] - The pharmaceutical industry report from the ASCO annual meeting emphasizes the importance of domestic dual antibodies and ADCs as innovative molecules [3] - The electric power industry report highlights the acceleration of solid-state battery industrialization and steady progress in charging pile construction [3] - The real estate industry report indicates a worsening of losses in the sector, with no significant improvement in fundamentals [3] - The communication industry strategy for June 2025 points to sustained demand for high-speed optical modules and the development of commercial aerospace [3] Fixed Income and REITs - The fixed income strategy for June 2025 anticipates a new round of market activity driven by technological advancements, with a focus on convertible bonds [10][17] - The public REITs report indicates that operational REITs are performing better than property REITs, with a notable increase in quality warehouse assets entering the market [12][14] - The REITs index shows a year-to-date increase of 10.0%, outperforming the Shanghai Composite Index [14][15] ESG Focus - The ESG report highlights significant developments in green finance and carbon market expansion in China, with new policies aimed at promoting sustainable development [18][20] - The ESG product monthly report indicates a notable increase in the issuance of ESG bonds, with fluctuations in the number of public ESG funds [22][23]

Core Viewpoint - Brazil's National Energy Policy Council (CNPE) decided to maintain the biodiesel blending ratio at 14% (B14), postponing the planned increase to 15% (B15) due to the need to balance energy security, environmental protection, and economic inflation [1] Group 1: Biodiesel Policy and Economic Impact - The adjustment of Brazil's biodiesel policy directly affects soybean oil prices and market demand, impacting soybean planting profitability [2] - The government aims to stabilize food prices as a priority, leading to a temporary halt of the B15 policy as a short-term measure to curb inflation [1][2] - The current inflation rate in Brazil is projected to reach 5.48% by early 2025, prompting the government to control food costs [1] Group 2: Supply Chain and Market Dynamics - Brazil's biodiesel policy is designed to ensure soybean oil demand, stimulating soybean planting and crushing industries, but it has led to a risk of 10 million tons of unsold soybeans due to reduced crushing volumes [2] - The domestic consumption of soybean oil is projected to reach 9.26 million tons, accounting for 77% of the expected production of 12 million tons in the 2024/25 season, creating a paradox of increased production without increased exports [6] - The reliance on a single market, such as India, increases export risks, and any fluctuations in India's domestic oil supply could reduce its import demand for Brazilian soybean oil [7] Group 3: Long-term Strategic Goals - Brazil's biodiesel industry has cumulatively reduced 240 million tons of CO2 over 20 years and aims to increase the blending ratio to 20% by 2030 under the Future Fuels Act [3] - The cost of biodiesel is 20%-30% higher than traditional diesel, with this premium ultimately borne by consumers, which could suppress consumption in an inflationary environment [3] - The government is encouraged to adopt a more flexible biodiesel blending policy that adjusts based on international soybean oil prices and domestic inflation rates [8] Group 4: Technological and Market Innovations - The industry is urged to accelerate the commercialization of second-generation biodiesel technologies, utilizing various waste oils and agricultural residues to reduce dependence on soybean oil [9] - Establishing a biodiesel technology innovation center through collaboration between academia and industry could enhance Brazil's competitiveness in the global biodiesel market [9] - The potential for biodiesel as a key raw material for sustainable aviation fuel (SAF) presents an opportunity for Brazil to reshape its position in the global bioenergy landscape [9]

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The passage of the 45Z amendment bill by the US House of Representatives is expected to have a significant impact on the biodiesel and renewable diesel industries, potentially increasing the demand for North American vegetable oil raw materials and supporting the price of CBOT soybean oil [1][2][7] - The restrictions on tax credits for foreign entities may reduce trade volume and overseas raw material demand, while the small refinery exemption policy may have a complex impact on raw material demand in the short and long term [10][18][20] - The future RVO policy in the US is still being determined, and its implementation will affect the total demand for renewable energy, which is also an important factor affecting the price of US soybean oil [17] Summary by Relevant Catalogs 1. Passage of the 45Z Amendment Bill - On May 22, the US House of Representatives passed a reconciliation bill including provisions to update and extend the 45Z clean fuel production tax credit. The bill will now be considered by the Senate [1] 2. Specific Provisions and Their Impacts 2.1 Extension of 45Z Credit - The 45Z credit will be extended to the end of 2031, which is beneficial for the continuous development of the biodiesel and renewable diesel industries and the demand for vegetable oil raw materials [2] 2.2 Raw Material Source Requirement - Raw materials must be produced or grown in the US, Mexico, and Canada, which is expected to increase the demand for North American crops and reduce the import of non - North American raw materials. In 2024, vegetable oil raw materials were mainly from North America, while animal fats and yellow greases still had imports from other regions. The policy may increase the use of canola oil and soybean oil [3][4] 2.3 Adjustment of Greenhouse Gas Emissions Calculation - The adjustment of the life - cycle greenhouse gas emissions calculation to exclude indirect land - use change emissions is expected to lower the carbon emission coefficient of vegetable oils, allowing for more subsidies. For example, the subsidy for producing renewable diesel with soybean oil is estimated to increase from $0.23 per gallon to $0.52 per gallon, which is beneficial for supporting the price of CBOT soybean oil [7] 2.4 Restrictions on Foreign Entities for Tax Credits - Tax credits for specific foreign entities are restricted. If a taxpayer is a specific foreign entity, no credit will be allowed after the enactment date. For entities affected by foreign influence, no credit will be allowed two years after the enactment date. This may reduce the trade volume of US biodiesel and renewable diesel and affect the demand for overseas raw materials [10][11][13] 3. Demand Performance 3.1 Raw Material Demand in 2025 - From January - February 2025, the total consumption of US biodiesel raw materials decreased by 23.9% year - on - year. Among them, vegetable oil consumption decreased by 31.7%, soybean oil consumption decreased by 33.4%, canola oil consumption decreased by 57.6%, and corn oil consumption remained flat [5] 3.2 Trade Volume in 2025 - From January - March 2025, US biodiesel imports decreased by 90% year - on - year, and exports decreased by 46% year - on - year. From January - February 2025, the net import of US renewable diesel became a net export, mainly to European countries, and the import from Singapore decreased by 94% year - on - year [16] 4. Other Policies to Be Concerned 4.1 RVO Policy - The US 2026 and subsequent RVO policies are still being determined. The market's expected range for the biodiesel RVO varies widely, and the price of US soybean oil has been trading on RVO - related themes. The EPA submitted a proposed rule to the White House Office of Management and Budget on May 14, and subsequent policy implementation needs to be monitored [17] 4.2 Small Refinery Exemption Policy - The news of small refinery exemptions is uncertain. If implemented, it may reduce current demand but increase future demand. The 13.6 billion gallons of exemption volume, when allocated to biodiesel at a 30% - 50% ratio, is expected to result in a total raw material demand range of 148 - 246 million tons. If 100% is used for biodiesel - produced RIN substitution, the total raw material demand is 493 million tons [18][19][20]

Investment Rating - The report maintains an "Increase" rating for the environmental protection industry [1] Core Views - The issuance of the "Ecological Environment Protection Supervision Work Regulations" by the Central Committee of the Communist Party of China and the State Council aims to comprehensively promote the construction of a beautiful China [8] - The solid waste sector is expected to see improved cash flow and increased dividends due to reduced capital expenditures and enhanced operational efficiency [9][12] - The water service sector is experiencing stable growth and high dividends, with water price reforms expected to reshape growth and valuation [12][14] Summary by Sections Solid Waste Management - Capital expenditures are decreasing, leading to significant improvements in free cash flow and increased dividends [9] - Key companies such as Junxin Co. are projected to distribute cash dividends of 507 million yuan in 2024, a 37% increase year-on-year, with a dividend yield of 4.4% [9] - The industry is entering a mature phase, with operational efficiency being enhanced through cost reduction and collaborations in heating and IDC [9][10] Water Services - The water service sector's revenue is projected at 65.5 billion yuan in 2024, with a net profit of 11.2 billion yuan, reflecting a 27% increase [12] - Water price reforms in cities like Guangzhou and Shenzhen are expected to drive a new round of price adjustments, enhancing profitability and stability [13][14] - Companies such as Yuehai Investment are highlighted for their ability to frequently adjust prices, with an expected dividend yield of 6.9% in 2025 [14] Environmental Equipment - The penetration rate of new energy sanitation vehicles increased by 6.14 percentage points to 14.55% in the first four months of 2025, with sales of new energy sanitation vehicles rising by 73% [29] - The total sales of sanitation vehicles reached 24,542 units, with a slight year-on-year decrease of 0.2% [29] Biofuels - The prices of biodiesel and waste cooking oil have decreased, leading to negative profit margins [37][38] - The average price of biodiesel was 7,700 yuan per ton, down 5.5% week-on-week, while waste cooking oil averaged 6,018 yuan per ton, down 1.2% [37] Lithium Battery Recycling - The profitability of lithium battery recycling has slightly declined due to fluctuating metal prices and a decrease in discount coefficients [41][42] - The average unit gross profit for waste material is estimated at -0.71 million yuan per ton [41]

Group 1 - The core business of the company includes the production and sales of biodiesel, environmental materials, and specialty chemical products [1] - The company is recognized as a national high-tech enterprise and has received multiple honors for its technological innovations [1] - As of April 18, 2025, the company has 44,878 shareholders, with an average holding value of 352,800 yuan and an average holding quantity of 27,600 shares [1] Group 2 - The latest financial report for Q1 2025 shows a revenue of 241 million yuan, a year-on-year decrease of 53.69%, and a net profit loss of approximately 49.9 million yuan, a year-on-year increase of 57.60% [1] - The company's gross profit margin is reported at -6.65% [1] - The current market capitalization of the company is 7.049 billion yuan, with a price-to-earnings ratio (TTM) of -7.95 and a price-to-book ratio of 1.19 [2]

Core Viewpoint - The company,卓越新能, has postponed its "annual production of 100,000 tons of hydrocarbon-based biodiesel production line project" for the second time, now expected to be completed by December 2025, due to various challenges including market volatility and policy restrictions [3][5]. Group 1: Project Delays - The hydrocarbon project was initially planned for delivery in June 2023 but has been delayed twice, first to June 2025 and now to December 2025, due to issues with project construction plans and land supply [4][5]. - The project is part of卓越新能's fundraising initiatives from its 2019 IPO, which originally did not include this project but was added after exceeding fundraising targets [5]. Group 2: Market Dependency - The company heavily relies on the European market, with projected export sales of 3.196 billion yuan in 2024, accounting for nearly 90% of total revenue [3][6]. - The domestic biodiesel market is still developing, with limited mandatory policies for biodiesel blending, leading to a focus on exports for companies like卓越新能 [6][7]. Group 3: Regulatory Challenges - The company faces significant challenges due to the European Union's anti-dumping measures, which could impose tariffs ranging from 10.0% to 35.6% on Chinese biodiesel products, with卓越新能 facing a specific rate of 23.4% [9]. - The EU's policies have created a dual challenge for卓越新能, as it must navigate both domestic supply constraints and international regulatory hurdles [8][9]. Group 4: Industry Trends - The domestic biodiesel market is beginning to see policy support, with pilot projects and guidelines being introduced to promote biodiesel and other renewable fuels [7]. - The company is competing in a market where the supply of waste oils for biodiesel production is limited, with only about 300,000 tons of usable waste oils available annually [8].

卓越新能公告，公司于2025年5月13日召开董事会和监事会，审议通过了关于部分募集资金投资项目延 期的议案。公司将"年产10万吨烃基生物柴油生产线项目"达到预定可使用状态的时间延长至2025年12 月。该项目原预计达到可使用状态日期为2023年6月，第一次变更后预计达到可使用状态日期为2025年6 月。因公司对项目建设方案进行优化论证调整，整体建设进度有所延后。项目延期未改变募投项目的内 容、投资用途、投资总额和实施主体，无需提交股东大会审议。 ...