Garbage power will be next year or a new show

In the environmental protection industry in 2012, many policies took advantage of it, but from the perspective of the mixed performance of the relevant companies in the first three quarters, some segmented industries still did not fully enjoy substantial benefits due to policy implementation issues. In this context, the advantages of the subdivided industries in which policies are put in place are more likely to be favored by the market.

The analysis pointed out that the waste incineration power generation sub-sector has a clear planning objective, and the key electricity price policy has been introduced. Since the second half of this year, the dominant enterprises have received project orders frequently, and this situation will not only translate into the related company’s annual performance this year. Contributions, but also due to the deepening of the order of the project and lay a good foundation for next year's performance.

Advantageous enterprise orders reserve has reached several hundred million yuan

The "Twelfth Five-Year Plan for the Construction of Harmless Treatment Facilities for Urban Domestic Garbage" issued in May this year proposed that the scale of waste power generation processing needs to increase from 8.96 tons/day at the end of 2010 to about 307,000 tons/day at the end of 2015. The compound growth rate reached 28%.

After the "Plan" proposed that the market began to heat up, and later the National Development and Reform Commission issued the "Notice on Perfecting the Policy of Waste Incineration Power Generation Price", it was clarified that the nation's waste power generation generated a unified implementation of the benchmark electricity price of 0.65 yuan per degree according to the processing volume, which further stimulated the market. Enthusiasm.

At present, waste-to-energy is officially entering the high-investment stage and the project has begun to accelerate its release. According to the report, a number of companies, including Sander Environment, Shengyun, Xingrong Investment and Evergreen Group, have frequently issued bid announcements for waste-to-energy projects since the second half of the year, and all companies have obtained as many as 20 projects in the year. This involved nearly 1 billion yuan in investment.

Affected by this, garbage power generation is unique in the environmental protection industry performance. According to statistics, the total revenue of the A-shares waste-to-energy industry in the first three quarters of this year and the net profit attributable to the parent company grew by 17.39% and 33.6% respectively year-on-year.

UBS Securities believes that environmental protection, as a typical policy-driven industry, will affect its development pace. The waste incineration power generation has clear policy protection from planning, on-grid tariff and power generation, and these substantive advantages will continue to be transformed into the performance contribution of relevant companies, especially advantageous enterprises, this year.

Policy continues to ferment for long-term performance

As the follow-up policy continues to ferment, especially the steady realization of planning goals, and the timely issuance of electricity price subsidies, it will certainly bring long-term benefits to the development of the industry.

On the one hand, from the perspective of the “planning” mentioned above, waste incineration and power generation have become the main methods for domestic urban domestic waste disposal in the future. According to market estimates, the market share of incineration treatment will increase from less than 20% in 2010 to 35% in 2015. On the other hand, waste-to-energy has the dual nature of environmental protection and new energy, and the subsidy funds involved in the unified benchmark price of electricity in the country are expected to be drawn from the additional subsidies for renewable energy prices, which means that the funds should be able to be paid in time.

In view of the above factors, many brokerage analysts believe that many waste-to-energy projects entered the construction cycle from the fourth quarter of this year to 2013, and that while the high investment promotes the growth of the business, the theme of environmental protection has gained valuation.

According to statistics from Rixin Securities, at present, the average gross profit margin of China's A-share major waste incineration power generation company, Nanhai Development, Sande Environment, and City Investment Holdings, is about 35% in 2011.

In spite of this, most companies are currently at the initial stage. The analysis further pointed out that in the future, companies that have the advantage of technology and engineering operations and have already made contributions to the business will undoubtedly gain greater benefits.