Multi-disciplinary growth in the field of environmental protection industry investment intensified

- Sep 15, 2016-

China has a trillion-dollar environmental protection market. Driven by multiple factors of policy and market in the new era, the environmental protection industry is expected to achieve overtaking. The closing of the local two sessions, the warming up of the two national conferences, and the continuous investment of the 13th Five-Year Plan will also intensify the environmental investment.

In recent years, the state has vigorously advocated the development of a green economy and building a harmonious society. The government's investment in environmental pollution control has increased year by year, and the environmental protection equipment manufacturing industry is facing a good development opportunity with broad market prospects. According to public data, the total investment in energy conservation and environmental protection industry is expected to reach 10 trillion yuan in the next five years, with an average annual investment of 2 trillion yuan.

In the near term, the good news with strong impact is the statement of the Securities and Futures Commission. On February 9, the China Securities Regulatory Commission said that strategic emerging industries such as energy conservation and environmental protection are of great significance to China's economic transformation and upgrading. As of June 2016, the number of energy-saving and environmentally-friendly enterprises listed on the SME board and the GEM was 70 and 59 respectively. In the next step, the CSRC will continue to support the listing of energy-saving and environmental protection enterprises that meet the national industrial policies and conditions for listing and listing, and encourage energy-saving and environmental protection enterprises to use the capital market to become bigger and stronger.

The Ministry of Environmental Protection has also stated that it will achieve full coverage of environmental protection inspectors in 2017. Environmental monitoring can reduce labor costs. The government has encryption equipment and services and increased demand for monitoring indicators. In combination with the recent “Green Development Assessment System” and “Ecological Civilization Construction Assessment Targets” The issuance of the System, we believe that the ecological environment monitoring network will usher in a comprehensive construction phase.

In addition, from the perspective of the provinces and cities that have ended the two sessions, increasing pollution control and improving environmental quality have been written into the 17-year work report by local governments. The two national conferences have not opened the first heat, and strengthening environmental governance is bound to become a focus again. The environmental protection sector may be expected.

The continued improvement of the policy level is reflected in the market level, and the environmental protection industry is also showing a bright and prosperous trend. With the approaching disclosure of the A-share annual report, the market is full of expectations for the annual report market. Tianfeng Securities released a report that the restructuring of the environmental protection policy and supervision system will bring about explosive growth in various segments of the industrial environmental protection market.

According to the report, as of the current environmental protection industry, there are 43 companies with pre-increased performance disclosures, and 11 companies with pre-reduction performance. A total of 54 companies have issued performance forecasts, accounting for more than 70%. The analysis of performance forecasts can basically see the growth of the industry. The whole picture. Among the 43 pre-increased companies, companies with significant growth in asset injection (such as Qiyuan Equipment, Zhongyuan Environmental Protection, etc.) were excluded. The median growth rate of performance was as high as 64%, and the results of 54 companies that disclosed the results were all disclosed. The median growth rate has also reached 39%, and this performance growth rate is 32% in 2015.

Bohai Securities said that in 2016, the environmental protection sector was oscillating and the overall market was lacking. After continuous adjustment, the overall valuation of the current sector is close to the historical median level, and the valuation has entered a relatively reasonable range. Considering the pull effect of the PPP model, it is expected that the national environmental governance investment will maintain a high growth rate in 2017, and the industry's profit may accelerate. With the release of the performance of listed companies, the attractiveness of the valuation of the environmental sector is expected to gradually increase.

2017 is the second year of the 13th Five-Year Plan and a key year for environmental governance. The analysis believes that the four major battles of air pollution, water pollution, soil pollution and garbage disposal will heat up again at the closing of the local two sessions, and the two national conferences will soon be warming up.

Of course, it can be expected that under the new planning, policies, regulations and systems, the scale of traditional environmental protection industries such as sewage treatment, garbage disposal, desulfurization and denitrification will be greatly expanded, sponge cities, underground pipe corridors, comprehensive regional management, soil remediation, Emerging markets such as black and odorous water bodies, sludge treatment, and VOCs monitoring are rapidly released, and environmental difficulties such as urban black and odorous water bodies, garbage sorting, smog, sludge treatment, and landfill leachate are expected to achieve technological breakthroughs.