Incident: On July 30, the General Office of the State Council issued the “Work Plan on Accelerating the Establishment of a Dual Carbon Emissions Control System”. The “Plan” proposes incorporating carbon emission indicators and related requirements into the national plan, establishing and improving policy systems and management mechanisms such as local carbon assessment, industry carbon control, corporate carbon management, project carbon evaluation, product carbon footprint, etc., and effectively linking with the national carbon emissions trading market to establish a complete carbon emission control system.
The “Plan” systematically plans the construction of a dual control system for carbon emissions to promote the continuous development of the carbon market. The “Plan” proposes that by 2025, the carbon emission statistics accounting system will be further improved, and a number of relevant carbon emission accounting standards for industry enterprises and product carbon footprint standards will be introduced and implemented. During the “15th Five-Year Plan” period, a dual carbon emission control system was implemented, mainly intensity control, and a comprehensive carbon neutrality assessment and assessment system was established, carbon emission accounting capabilities in key areas and industries such as electricity, steel, non-ferrous, building materials, and petrochemicals were strengthened, and management systems for key energy use and carbon emission units were improved. After the carbon peak is reached, a dual carbon emission control system with total control as the main focus and intensity control as a complement, established a carbon neutrality target evaluation and assessment system, further strengthened the carbon emission control requirements for various regions, key areas, industries, and enterprises, improved the carbon footprint management system for products, and promoted a steady decline in total carbon emissions. We believe that the “Plan” provides a clear path plan for establishing a dual carbon emission control system. In the future, policies and systems such as local carbon assessment, industry carbon control, and corporate carbon management will be further refined to promote the expansion of the national carbon emissions trading market and the improvement of the regulation mechanism.
With a strong first-mover advantage, the company is expected to fully benefit. The company is a leading inspection leader in construction engineering and building materials in China. It has now formed five comprehensive business platforms, including inspection, certification, testing instruments, intelligent manufacturing, measurement and calibration, scientific research and technical services. Since entering the carbon market in 2009, the company has now obtained various domestic and foreign qualifications such as CDM, VCS, GS, etc., and provides one-stop services such as third-party verification of carbon emission rights transactions, energy saving reviews, and energy saving and emission reduction technology consulting, and has provided services to thousands of enterprises in more than 20 provinces and cities.
The company hosts and participates in 13 national, industry and group standards relating to greenhouse gas accounting and reporting, carbon neutrality, and carbon labeling. In 2023, the company's carbon services business revenue was 0.033 billion yuan, up 125.6% year-on-year.
Investment advice: We expect the company's 24-26 revenue to be 3.081/3.524/3.928 billion yuan, net profit to mother 0.302/0.353/0.37 billion yuan, and corresponding PE 15.3/13.1/12.5x, respectively. Maintain a “Recommended” rating.
Risk warning: risk of fluctuating downstream demand, risk of damage to credibility and reputation, risk of weakening management capacity