Analysis of Investment Opportunities & Listed Companies in Yangtze River Protection with Over 100 Billion Yuan Fund

Based on the collected policy and market information, I will analyze from the dimensions of policy key points, segmented beneficiary fields, investment opportunities, relevant listed companies and performance impacts, risks and operation key points, etc. All references are from retrieved public materials.

I. Core Policy Points and Fund Allocation

• Fund scale and sources: A total of over 100 billion yuan will be arranged, mainly from ultra-long-term special treasury bonds and central budgetary investment [1].
• Implementation cycle and task scope: The “Three-Year Action Plan for Further Implementing and Doing a Good Job in Yangtze River Protection” clarifies key tasks for 2025-2027, focusing on water pollution control, water ecological protection and restoration, etc. [1].
• Four key directions:

1. Key river and lake ecological restoration
2. Urban black odorous water body treatment
3. Energy conservation and carbon reduction in key industries (e.g., steel, petrochemical, non-ferrous metals, building materials and other high-energy-consuming industries)
4. Energy conservation and carbon reduction projects in key areas

• Mechanism construction: The “Implementation Plan for Further Promoting the Construction of Horizontal Ecological Protection Compensation Mechanism for Major Rivers” was issued, establishing a unified basin horizontal ecological protection compensation mechanism in the main stream of the Yangtze River [1].

II. Investment Opportunities in Segmented Fields

1. Water Ecological Restoration and Water Environment Governance

• Beneficiary content: River and lake water quality improvement, shoreline ecological restoration, classified regulation and monitoring of sewage outlets into rivers, intelligent supervision of water environment, etc.
• Technologies and equipment: Water treatment membrane technology, integrated water treatment equipment, smart water services and industrial internet platforms, online monitoring instruments, etc.
• Order-driven logic: With the strengthening of basin comprehensive improvement and cross-section assessment, local governments will accelerate the supplement of weaknesses and upgrading of water environment infrastructure.

2. Urban Black Odorous Water Body Treatment and Urban Water System

• Beneficiary content: Pipeline network inspection and repair, rainwater and sewage diversion transformation, quality and efficiency improvement of sewage treatment plants, harmless treatment and resource utilization of sludge, etc.
• Systematic improvement: Combined with drainage and flood control and sponge city construction, forming an integrated governance demand of “plant-network-river (lake)”.
• Business models: Long-term operation models such as BOT/PPP/concession and EPC+O are conducive to forming stable cash flow.

3. Industrial Energy Conservation and Carbon Reduction and Transformation of High-Energy-Consuming Industries

• Covered industries: Steel, petrochemical, non-ferrous metals, building materials, etc. [2].
• Technical paths: Waste heat and pressure utilization, system energy efficiency optimization, process transformation and equipment renewal, digital energy management platform, green power/green hydrogen replacement, etc.
• Policy coordination: Green credit (as of the end of Q3 2025, the balance of local and foreign currency green loans was 43.51 trillion yuan, an increase of 17.5% from the beginning of the year) [2] and carbon market mechanisms provide capital and price incentives for project implementation.

4. Sludge and Solid Waste Resource Utilization

• Coordination with sewage treatment: Sludge reduction, harmless treatment and resource utilization of sewage plants (co-incineration, building material utilization, compliant paths for land use, etc.).
• Circular economy: Industrial solid waste and renewable resource utilization, with supporting policies and financial tools continuously improved.

III. Beneficiary Directions and Target Examples (Focusing on Business Coverage and Order Acquisition Capability)

• Comprehensive water services and water environment governance (including membrane technology, water environment operation, smart water services): Capital Environment (600008), Entrepreneurial Environment (600874), OriginWater (300070), Grandblue Environment, Chengdu Xingrong Environment, Chongqing Water Group, etc.
• Water treatment equipment and system integration: Segmented enterprises such as membrane material and equipment manufacturing, integrated water treatment equipment, smart water services and industrial internet platforms, monitoring instruments, etc.
• Solid waste and resource utilization: Waste incineration and co-disposal, sludge/hazardous waste/general industrial solid waste treatment, renewable resource recycling, etc.
• Industrial energy conservation and services: Energy-saving service companies focusing on energy efficiency improvement and process transformation of high-energy-consuming industries, waste heat utilization, green supply chain and carbon management, etc.

IV. Possible Impacts on Listed Companies’ Performance

• Revenue side:
  • Accelerated order acquisition pace. Orders such as water environment comprehensive governance and pipeline network system transformation are large in volume and long in cycle; industrial energy conservation projects and equipment updates mainly focus on technical transformation and operation services, with relatively small single project volume but large quantity.
  • Improvement in payment collection and cash flow. Relying on central funds and special bonds/special treasury bond support, combined with the implementation of the horizontal ecological compensation mechanism, local governments’ financial performance capabilities and settlement efficiency are expected to marginally improve.
• Profit side:
  • Improvement in project quality. More emphasis on full-life-cycle performance assessment and long-term operation and maintenance is conducive to improving the quality of project returns.
  • Financing costs and capital expenditures. The expansion of green credit and green bonds is conducive to reducing financing costs; the improvement of project technical content and equipment update requirements may lead to short-term capital expenditure pressure.
• Financial characteristics:
  • Improvement in operating cash flow may be reflected before the income statement;
  • The increase in the proportion of operating assets is conducive to forming more stable cash flow and revaluation of asset-side value.

V. Operation Key Points and Risks

• Stock selection logic:
  • Business matching degree: Having clear technology and order implementation capabilities in the chain of “water ecological restoration - urban water system - industrial energy conservation - solid waste and resource utilization”.
  • Regional location: Projects are more dense in 11 provinces and cities in the Yangtze River Basin, and local enterprises and platform companies have more advantages.
  • Qualifications and cases: Having successful cases and qualifications in large-scale water environment comprehensive governance, complex pipeline network transformation, industrial energy conservation transformation, etc.
  • Cash flow and liabilities: Pay attention to the matching degree between operating cash flow and capital expenditure, as well as the level of interest-bearing liabilities.
• Market rhythm:
  • Policy and fund implementation (central budgetary investment allocation, local supporting rules introduction) → order signing → construction/equipment procurement → revenue recognition → operation and maintenance and payment collection, usually with a transmission cycle of 6-18 months.
  • Short-term emotional fluctuations change with policy statements and project bidding progress; pay attention to quarterly orders and changes in contract liabilities.
• Risk tips:
  • Fund implementation pace is lower than expected;
  • Uneven local financial strength and supporting capabilities lead to differentiation in project progress;
  • Some projects have high technical difficulty and involve cross-departmental coordination, leading to the risk of extended implementation cycles;
  • Changes in macro interest rates and exchange rates affect financing costs and overseas business.

VI. Conclusion

• The over 100 billion yuan special fund for Yangtze River protection will release demand along the chain of “water ecological restoration - urban water system - industrial energy conservation - solid waste and resource utilization”, benefiting companies with technical and order implementation capabilities in relevant fields.
• Water environment comprehensive governance, urban black odorous water body treatment and pipeline network transformation, energy conservation and carbon reduction in high-energy-consuming industries, and sludge and solid waste resource utilization are key directions; segmented links such as water treatment equipment and system integration, smart water services and industrial internet, and energy-saving services have Alpha opportunities.
• It is recommended to take “business coverage + order quality + cash flow” as the core screening indicators, and prioritize companies with perfect layout in the Yangtze River Basin, strong project performance and payment collection capabilities, and increasing proportion of operating assets.

References
[1] National Business Daily - National Development and Reform Commission: Coordinate the arrangement of over 100 billion yuan from ultra-long-term special treasury bonds to support the construction of Yangtze River protection projects (https://www.nbd.com.cn/articles/2026-01-05/4206647.html)
[2] Securities Daily - Green finance helps the all-out effort of energy conservation and carbon reduction (https://www.stcn.com/article/detail/3561515.html)