China's commitment to reduce carbon emissions and increase use of renewable energies will likely benefit companies engaged in generation, transmission and storage of electricity, and give investors long-term opportunities, analysts said.
Policymakers said China will also promote use of "green" vehicles in public transport.
The number of approvals for infrastructure projects that support use of renewable energies has risen in recent times.
In February alone, the National Development and Reform Commission approved eight such projects for water resources and hydropower engineering with combined investments of 28.1 billion yuan ($4.31 billion).
On March 1, the State Council released a guidance on pushing forward development of energy sectors using Internet technologies.
The guidance said China is looking to create an open system for energy sectors. This is to enable power generators to transact directly with power users. Such deals will be based on flexible green energy trading platforms with the help of Internet technologies.
The guidance outlines that the platforms will support wind power, solar power, water power and other varieties of power to be directly sold to users.
Increased use of electric vehicles in public transport is another growth driver for the renewable energy sector. This will demand more products and services for electricity-fueled engines and mechanical systems, charging networks, power transmission lines and storage services.
According to transport ministry data, more than 50,000 new energy vehicles, used in public transport in more than five cities, are now powered by electricity, liquified natural gas, or a hybrid of multiple energies.
Transport Minister Liu Xiaoming said by 2020 their number is expected to reach 200,000 as the country has been making efforts to popularize new energy vehicles.
Researchers said they have observed in the past few weeks that power transmission companies that focus on renewable energies and Internet technologies have received investor support.
According to data of Shanghai WIND Information Technology Co Ltd, stocks of 17 companies in the renewable energy sector have risen on five consecutive trading days last week, with share deals clocking upwards of a collective 600 million yuan.
A research note from Guotai Junan Securities Co Ltd said that integrated grids, ultra-high-voltage electricity transmission projects and electric vehicle charging pole networks are all in great demand.
Companies that can offer products and services to meet the demand may see more growth opportunities in the next five years.
Andrew Wang, vice-president and chief investment officer with Manulife TEDA Fund Company, said companies that focus on the upstream supply chain of the renewable energy sector may benefit the most from the nationwide campaign to pursue environment-friendly economic growth.
"In the long-term, we see bright prospects for the entire sector in the A-share market, and companies with more added-value offerings will have a wider profit margin," said Wang.
