The Two Sessions Will Come As Soon As The Environmental Theme Will Detonate The Market
Nov 13, 2018

"Two meetings will be on the market" as scheduled. It is reported that during the two sessions, environmental protection theme investment has quietly started. On March 8, the three sectors of water, gas and environmental protection engineering and services performed outstandingly. The wave of the two sessions also indicates that 2017 will be a good year for environmental companies, and there will be sustained profit growth.


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With the convening of the National "Two Meetings", as a hot topic of "two meetings" over the years, the environmental protection theme once again detonated the market. Analysts believe that environmental protection theme investment has quietly started, and relevant concept stocks deserve investors' long-term attention. On March 8, the water, gas and environmental protection engineering and services sectors in the utility industry performed well. Among them, Botian Environment, Yanqi Natural Gas and its environmental protection have increased daily. Today, this edition specifically analyzes and interprets the above three sectors and their leading stocks for investment reference.


Water long-term value investment has been bought

On March 8, A-shares were adjusted. The water sector (Shenwan II) rose 0.89% against the market. In terms of individual stocks, the Straits Environmental Protection Daily limit, the first share rose by 5.84%, and the national water and entrepreneurial environmental protection increased by more than 1%. , respectively: 2.71%, 1.63%, in addition, indigo environment, Xingrong environment, Zhongyuan environmental protection, Qianjiang water conservancy and other stocks have also achieved varying degrees of rise.


In terms of capital flow, since the beginning of this week, some stocks in the water sector have shown a net inflow of large single funds. Guozhong Water, Strait Environmental Protection, Jiangnan Water, and Indigo Environment have all become the targets of large-scale funds. The inflows were: 5,625,500 yuan, 15,15,500 yuan, 4,813,800 yuan, 3,545,600 yuan.


For the water sector, Huatai Securities believes that the long-term value investment has already arrived. 1. The performance growth can be expected: the current water price only reflects the growth rate of CPI, and does not reflect the resource demand of water, the impact of value-added tax, and the price increase of bidding; The unit price is processed to the rising critical point, and the processing volume will continue to increase, so there is a Davis double click on the performance. 2. The valuation can be improved: In the context of de-leveraging in the whole market, water has become the most beneficial direction of “PPP+asset securitization”, which can improve the return on net assets of water companies and turn them into valuation upgrades. 3. Through the policy layout, the pollution control behavior is changed from passive to active, driving the industry to develop in a positive cycle, which is conducive to performance. 4. Currently in the low valuation, each company is affected by the value-added tax in 2016. The 2016 annual report is not optimistic, and the performance growth rate is the lowest. For long-term value investors, there are opportunities for opening positions.


In terms of valuation, the Securities Research Market Research Center based on the statistics of the straight flush shows that as of March 8, the latest dynamic price-earnings ratio of Zhongshan Public is 16.18 times, which is the lowest among the water sector's stocks. In addition, Xingrong environment, indigo environment, The latest dynamic P/E ratios of Jiangnan Water, Wuhan Holding and Chongqing Water are all below 30 times, namely: 21.03 times, 22.63 times, 23.32 times, 25.32 times, 27.20 times.


Regarding the layout of individual stocks, Huatai Securities is optimistic about three types of stocks: 1. Standard stocks with membrane technology, superior in terms of project source and capital; 2. Standard stocks with layout in rural sewage treatment, such as Tianxiang environment; 3. Municipal water The underlying stocks, such as Xingrong Environment, Chongqing Water, Wuhan Holdings, Hongcheng Water, and Entrepreneurship.


Ping An Securities also recommended an over-allocation of the water sector. The water sector is relatively robust and can be deployed as a defensive sector. For the specific target stocks, it is strongly recommended: Tianxiang Environment, Zhongjin Environment, Baan Water.


Gas superimposed two favorable catalytic investment opportunities

According to the statistics of Tonghuan, the market research center of Securities Daily showed that on March 8, the gas sector (Shenwan II) rose 0.49 percentage points against the market. In terms of individual stocks, the natural gas was strong and the new natural gas and Jinhong energy were also increased. At 1% or more, they are: 1.69% and 1.09% respectively. In addition, the gas stocks that have risen on March 8 include Zhongtian Energy and Shaanxi Natural Gas.


In terms of capital flow, since the beginning of this week, a total of six gas stocks have shown a net inflow of large single funds. These six stocks include: 皖 natural gas (13,776,700 yuan), medium


Tianyou Energy (1,974.61 million yuan), Jinhong Energy (1,381,000 yuan), new natural gas (8.626 million yuan), Xinjiang Haoyuan (293.55 million yuan), and Datong Gas (370,900 yuan), of which, 皖 natural gas, Zhongtian energy 3 stocks such as Jinhong Energy, the net inflow of large single funds on March 8 was more than 10 million yuan, respectively: 60.458 million yuan, 16.83 million yuan, 12.4815 million yuan.


Huatai Securities said that in the near future, it is optimistic about the two favorable policies of the gas industry superimposed smog control and natural gas reform, and the dynamic price-earnings ratio of individual stocks is 20 to 30 times, which shows the value of layout. The order of benefit of the relevant stocks in the gas industry is as follows: 1. Promote smog management in economically developed areas with the policy of “coal to gas”, which will lead to the increase of gas consumption; 2. The reform of state-owned enterprises brought about by natural gas reform and the expectation of access; 3 The downstream demand growth brought by the natural gas price reform. It is recommended to focus on the underlying stocks: Shenzhen Gas, Chongqing Gas, Jinhong Energy, Zhongtian Energy, Guoxin Energy, Changchun Gas, etc.


Environmental engineering and services

According to the statistics of Flush Data, the Securities Research Center of the Securities Daily reported that on March 8, the environmental protection engineering and service sector (Shenwan II) rose 0.14 percentage points against the market. In terms of individual stocks, Botian Environment maintained a strong daily limit. Since then, the increase has reached 5.10%, Mengcao Ecology (1.64%), Kerong Environment (1.41%), High Energy Environment (1.38%), Shenwu Energy Conservation (1.34%), Boschke (1.33%) and other stocks have also increased In addition to more than 1%, in addition, the environmental protection engineering and service stocks that have risen on March 8th include: Disen shares, Shengyun Environmental Protection, Sinoma Energy Saving, Weilley, ESD, Shenwu Environmental Protection, Fresh Environment, Poly Light technology.


In terms of capital flow, this week, including De Chuang Environmental Protection, Shengyun Environmental Protection, Wanbangda, Shenwu Energy Saving, Three Dimensional Silk, Botian Environment, Concentration Technology, Tianzhu Environment, High Energy Environment, Bishuiyuan, Weierli, Dyson The 12 stocks including the same showed a net inflow of large single funds. The net inflow of accumulated large single funds was: 25,239,600 yuan, 57,735,500 yuan, 5,487,500 yuan, 2,559,180,000 yuan, 2,302,800 yuan, 1,118,890 yuan, 1,914,300 yuan. Yuan, 6,832,700 yuan, 5,842,200 yuan, 5,742,700 yuan, 5,508,600 yuan, 1,800,900 yuan.


BOC International believes that the performance of environmental protection companies in 2016 has been basically reflected in the stock price, and the recent stock price rise is the best embodiment. Therefore, it is also meaningful to look at 2017. 2017 will also be a good year for environmental companies, with continued profitable growth. The environmental protection theme is also the focus of the national “two conferences”.


Guosen Securities said that this year's government work report once again focused on air pollution, making demands more specific and stricter standards, showing the government's high confidence and determination to control air pollution. Air pollution treatment, monitoring, clean energy substitution and energy-saving renovation will have a large number of demand being released, and other environmental protection sectors will also be well promoted by policies. It is recommended that the super-clean emission leading stocks of thermal power plants have a fresh environment in the non-electrical field layout; the concentrated light technology and Yingfeng environment fully promoted by the automatic monitoring of the benefits; and the clean energy service provider who develops central heating instead of small boilers in the Beijing-Tianjin-Hebei region Qing Group; soil remediation quality stocks high-energy environment; urban and rural environmental remediation, waste separation and recycling leading enterprises Enlighten Sander; and energy-saving transformation enterprises with unique technological advantages, Shenwu environmental protection, God fog energy saving.


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