Enforcement of dual-energy consumption-control targets triggers supply-side disruption

■ After Inner Mongolia’s enforcement of dual-control targets for the 14th FYP (2021–2025) in Mar 2021, Yunan also released its dual-control targets for the rest of 2021. ■ This is in line with our discussion about possible measures released by other provinces regarding energy-consumption standard upgrades. ■ According to the NDRC’s release, provinces such as Qinghai, Ningxia, Guangxi, Guangdong, Fujian, Yunnan and Jiangsu didn’t achieve the dual-control targets in 1H21. ■ We don’t rule out the possibility that other provinces will release measures that may affect energy-intensive industries, including chemicals, cement, glass and paper manufacturing. ■ We still like CNBM [3323.HK], Conch Cement [0914.HK], Lee & Man Paper [2314.HK], Xinyi Glass [0868.HK] and China Glass [3300.HK]. Other beneficiaries include China Hongqiao [1378.HK], Chalco [2600.HK], L&M Chemical [0746.HK], Nine Dragons Paper [2689.HK], Kingboard Chemical [0148.HK], China Blue Chem [3983.HK], Yanzhou Coal [1171.HK], and Baofeng Energy [600989.CH].