Guosheng Securities: Zhejiang and Guangxi increase investment in solid waste management, environmental protection industry chain ushering in new opportunities.

Guosheng Securities research report believes that Zhejiang and Guangxi have intensified solid waste management, and the environmental protection industry chain has ushered in a new opportunity. Zhejiang Province has released the "Five-Year Plan" for industrial solid waste, with "reduction, recycling, and harmlessness" as the core. It requires that by 2030, the intensity of industrial solid waste generation should be controlled at 0.2 tons per 10,000 yuan of industrial output value, the comprehensive utilization rate should be maintained at over 98.0%, and the proportion of hazardous waste landfill should be reduced to within 5.0%. In terms of measures, it implements "dual control" of intensity and total volume at the source, promotes large-scale disposal of bulk solid waste and high-value utilization of emerging solid waste, and achieves full-process closed-loop management through digital reforms on the regulatory side. This is conducive to the development of solid waste treatment industry, and it is recommended to pay attention to Huicheng Environmental Protection, Weiming Environmental Protection, etc. Guangxi has issued the "Action Plan for Strong Leading Enterprises to Cultivate Chains", with "greenization" as the core direction of industrial development, clearly stating that modern green chemical industry and green building materials will be nurtured as key pillar industries, and priority will be given to supporting leading enterprises and key projects in their industrial chains. This directly benefits the circular economy industry, and it is recommended to pay attention to Huicheng Environmental Protection, etc. At present, macro interest rates are at historically low levels. The research report is optimistic about companies with outstanding technical capabilities, excellent cash flow, and high valuation and high dividends in quality state-owned enterprises. Key recommendations include: 1) Leading companies in the resource utilization track that benefit from carbon neutrality such as Guohai Environment; Huicheng Environmental Protection, which won major hazardous waste projects and entered the waste plastic recycling market. 2) Hongcheng Environmental, a state-owned environmental protection enterprise with high dividends, excellent management, and sustained growth in performance.