Garbage classification welcomes good news, concept stocks "break out of deep pits", two sources of funds are eyeing these low price-earning ratio stocks at the same time

On November 28, the A-share market fell sharply in early trading, and the index's decline narrowed to 0.75% at the end of the afternoon. On the market, topics such as the Internet, construction machinery, securities, banking, and insurance were among the top decliners.

The two major sectors, hotel catering and tourism, bucked the trend and surged, with index increases exceeding 4%. A total of 32 stocks in these two industries were all in the red, with Huatian Hotel and Emeishan A rising to the limit.

China Merchants Securities pointed out that the recent announcement by the central bank to lower the required reserve ratio has once again confirmed that the current tone of monetary policy has not changed significantly, boosting short-term market sentiment. The profits of industrial companies bottomed out in October, and A-share performance may still be under pressure in the fourth quarter. Taking into account the recent cooperation and guidance of a series of financing support policies, the probability of increasing stabilizing growth policies has further increased.

Garbage classification welcomes great benefits again

The National Development and Reform Commission and other departments recently issued the "Guiding Opinions on Strengthening the Construction of Domestic Waste Incineration Treatment Facilities in County-level Areas" (referred to as the "Guiding Opinions").

The document sets out the main goal. By 2025, county-level regions across the country will basically form a domestic waste classification and treatment system that is compatible with economic and social development. The Beijing-Tianjin-Hebei and surrounding areas, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area will The qualified county-level areas in the district and national ecological civilization pilot zones have basically achieved full coverage of domestic waste incineration treatment capabilities.

The "Guiding Opinions" propose that by 2030, the supply capacity and level of domestic waste classification and treatment facilities in county-level regions across the country will be further improved, and the technology and business model of small domestic waste incineration treatment facilities will be further matured, except for a few. Except for qualified special areas, the domestic waste incineration processing capacity in county-level regions across the country basically meets the processing needs.

According to the "14th Five-Year Plan" Urban Domestic Waste Classification and Treatment Facilities Development Plan issued earlier by the National Development and Reform Commission and the Ministry of Housing and Urban-Rural Development, by the end of 2025, the national urban domestic waste incineration treatment capacity will reach 800,000 tons/ Around 65% of the city's domestic waste incineration treatment capacity was in 2016.

During the "14th Five-Year Plan" period, the construction of domestic waste classification and treatment facilities has entered a critical period. Promoting the implementation of high-level protection of the ecological environment and comprehensively improving resource utilization efficiency have put forward new and higher requirements for the classification and treatment of domestic waste in our country. Industry insiders pointed out that front-end waste collection and transportation, mid-end resource utilization and back-end disposal are all expected to benefit, and the waste classification and disposal industry has ushered in a golden development period.

Many listed companies are developing waste classification industry

According to statistics from Securities Times·Databao, there are more than 90 listed companies in the A-share market that are developing waste classification-related businesses. Recently, many listed companies have responded to their business layout on interactive platforms.

Pegasus International’s environmentally friendly new energy business currently mainly operates domestic waste incineration power generation and sludge treatment related businesses.

Junxin Co., Ltd. has been actively paying attention to and tracking the integration and innovation of new energy and informatization. At present, the company's technology research and development results are mainly focused on the incineration of domestic waste for power generation, municipal sludge, leachate, and fly ash. Treatment and disposal of urban solid waste and green energy fields.

Hejia New Energy Vehicle Co., Ltd., a wholly-owned subsidiary of TusEnvironment, is mainly engaged in the design, research and development, manufacturing and sales of special sanitation vehicles and environmental protection equipment.

Zhongke Environmental Protection has domestic waste power generation projects such as Cixi Project and Ningbo Project that adopt the "cogeneration" model to provide heating services to surrounding industrial enterprises and obtain steam sales revenue. Some projects are actively being carried out. And promote local civil heating work and provide heating services to residents.

In the first three quarters of 2022, Shengyuan Environmental Protection’s operational waste-to-energy power plants received a total of 4.1114 million tons of waste into the plant, a year-on-year increase of 13.53%; the cumulative power generation was 1.409 billion kilowatt-hours, a year-on-year increase of 18.77%; online The electricity consumption was 1.195 billion kWh, a year-on-year increase of 14.77%.

According to data treasure statistics, as of the close of trading on November 28, the A-share market value of waste classification concept stocks was ***673.5 billion yuan; more than half of the concept stocks have a market value of less than 5 billion yuan, including Evergrande High-tech, Camellia The market value of A-shares such as A-shares, Yangzi New Materials, Senyuan Shares, and Meizhi Shares is less than 2 billion yuan.

Two sources of funds simultaneously added positions in 4 concept stocks

Since the beginning of this year, the overall trend of environmental protection topics has been relatively flat, with the cumulative decline of the garbage classification index reaching 14.46%, underperforming the Shanghai Composite Index in the same period.

Tianrui Instruments, Jianlang Hardware, Ruiming Technology, and Baichuan Changyin fell more than 40%.

With the substantial adjustment of the sector, the valuation levels of many concept stocks have moved downwards. As of the latest, the rolling price-to-earnings ratios of 23 stocks are less than 20 times; the rolling price-to-earnings ratios of First Environmental Protection, Chengfa Environment, Hongcheng Environment, etc. are less than 10 times.

Among these low-valuation concept stocks, Beishang Capital has increased its holdings of more than one million shares in 7 stocks since November, namely First Environmental Protection, Tongji Technology, Shantui Shares, Sanfeng Environment, Chengfa Environment, Shanghai environment, Wangneng environment.

According to data treasure statistics, based on the average transaction price in the range, 9 stocks from Beijing Capital increased their holdings by more than 10 million yuan. During this period, financing funds increased their positions in only 4 stocks exceeding 10 million yuan at the same time. They are: Shanghai Environment, Hanlan Environment, Wangneng Environment, and Tongji Technology.