Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [2][6]. Core Views - The company is the largest waste-to-energy operator globally, with a significant focus on environmental energy, water services, and new energy sectors. In 2022, it generated revenue of HKD 37.321 billion, with environmental energy contributing 59% [2][14]. - The company is transitioning from external growth to internal growth, as operational revenue has increased significantly, indicating a shift towards a more stable operational phase [2][18]. - The company's cash flow is expected to improve due to subsidy recoveries, enhancing its dividend yield, which has been around 30% historically [2][22]. Summary by Sections 1. Company Overview - The company, under the Everbright Group, has developed into the world's largest waste-to-energy operator since its establishment in 1993, with a focus on environmental energy, water services, and new energy [2][14]. - As of June 2023, the company has 188 waste-to-energy projects with a daily processing capacity of 157,200 tons of municipal waste [14][15]. 2. Operational Performance - The operational revenue ratio has increased, with 49% in 2022 and 57% in the first half of 2023, indicating a shift towards operational maturity [2][18]. - The company has reduced capital expenditures, leading to a positive outlook for free cash flow as it transitions from a high capital expenditure phase to a mature operational phase [2][20]. 3. Financial Performance - The company is projected to achieve revenues of HKD 37.475 billion, HKD 36.002 billion, and HKD 36.650 billion for 2023-2025, with corresponding net profits of HKD 4.090 billion, HKD 4.115 billion, and HKD 4.250 billion [2][6]. - The current price-to-earnings (PE) ratio is low compared to peers, enhancing the attractiveness of its dividend yield, projected at 6.6%, 6.7%, and 6.8% for 2023-2025 [2][6]. 4. Sector Analysis - The waste-to-energy sector is transitioning from rapid expansion to a focus on operational efficiency, with the company leading in waste processing capacity, which increased from 14.27 million tons/year in 2017 to 46.79 million tons/year in 2022 [2][24]. - The company has strategically positioned itself in economically developed regions, enhancing its operational metrics and profitability [2][30]. 5. Water Services and Green Energy - The water services segment has shown stable growth, with wastewater treatment capacity increasing to 5.77 million tons/day by the end of 2023 [2][35]. - The green energy segment, primarily focused on biomass power generation, is expected to benefit from improved cash flow as government subsidies are anticipated to be received [2][22].

海 外 研 证券研究报告 究 ＃industryId＃ 环保 ＃investSuggestion＃ ＃00257 .HK ＃光dy大Com环pa境ny＃ 港股通（沪/深） dyStockco ＃ 增持 ( i维nve持stS ） d e＃ 自 由现 金流首年转＃正title＃在 望，高派息可期 uggesti on gC e＃ ha n ＃createTime1＃ 2024年 4月 2日 投资要点 公 ＃市场ma数rk据et Data＃ ＃summary＃ 事件：光大环境披露 23 年业绩：营收同比-14.0%至 320.9 亿港元，归母净利润同 司 日期 20240328 比下降3.8%至44.3亿港元。单独看H2，营收同比-0.5%至157.9亿港元，归母净 跟 收盘价（港元） 3.04 利润同比-5.3%至16.4亿港元。每股拟派发末期股息8港仙，全年派息比率约31%。 踪 总股本（亿股） 61 点评：全年运营业务收入占比提升10ppt至60%，集团EBITDA利润率提高5.6ppt 报 流通股本（亿股） 61 至40.0%。全年集团运营/建造业务收入同比+2.2%/-41.9%至191.8/76.8亿 ...

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company achieved a total operating revenue of HKD 32.49 billion in 2023, a decrease of 14% year-on-year, and a net profit attributable to shareholders of HKD 4.43 billion, down 4% year-on-year [2][8] - The proportion of operational and financial income rose to 76%, while the impairment in the green environmental protection sector negatively impacted profitability [2] - The company is expected to see a significant improvement in free cash flow in 2024, with a projected turnaround to positive cash flow [2][8] Summary by Relevant Sections Financial Performance - In 2023, the company reported a total revenue of HKD 32,495 million, down 14% year-on-year, and a net profit of HKD 4,429 million, down 4% year-on-year [2] - The operational and financial income accounted for 76% of total revenue, an increase of 11 percentage points year-on-year [2] - The company’s asset-liability ratio decreased to 65.37%, down 1.79 percentage points [2][8] Cash Flow and Capital Expenditure - The company’s operating cash flow for 2023 was approximately HKD 7.5 billion, with capital expenditures around HKD 7.8 billion, indicating a significant narrowing of the cash flow gap [2] - Free cash flow is expected to turn positive in 2024, supported by a decrease in capital expenditures and improved operational income [2][8] Profitability and Valuation - The report adjusts the net profit forecasts for 2024 and 2025 to HKD 4.468 billion and HKD 4.564 billion, respectively, with a projected net profit of HKD 4.697 billion for 2026 [2] - The company’s P/E ratio is projected to remain around 4 times for the next few years, indicating potential for valuation recovery [2][8]

Investment Rating - The report maintains a "Buy" rating for the company [3] Core Views - The company's performance in 2023 slightly exceeded expectations, with a revenue of HKD 32.09 billion, a year-on-year decrease of 14%, and a net profit of HKD 4.43 billion, down 4% year-on-year. The actual performance was better than Bloomberg's consensus estimate of HKD 4.34 billion and Wind's median estimate of HKD 4.01 billion [2][6] - The company is expected to see a turning point in free cash flow in 2024, with dividends likely to increase to a higher level. The current dividend yield is 8.07% [2][6] - The company has a strong operational performance, with a waste incineration capacity of 134,000 tons per day and a waste disposal volume of 48.6 million tons, reflecting a 7% year-on-year increase and a capacity utilization rate of 99% [2][6] Summary by Sections Financial Performance - In 2023, the company achieved a revenue of HKD 32.09 billion, a decrease of 14% year-on-year, and a net profit of HKD 4.43 billion, down 4% year-on-year. The decline in revenue was primarily due to a reduction in new projects and construction revenue [2][6] - The company's gross profit margin improved by 4.55 percentage points to 43.04%, the highest in the past eight years, while the net profit margin increased by 1.69 percentage points to 16.30% [2][6] Future Outlook - The company is expected to see a positive turning point in free cash flow in 2024, driven by a reduction in capital expenditures and optimistic signals regarding national subsidies [2][6] - The company has a total cash dividend of HKD 1.351 billion in 2023, with a dividend payout ratio of 30.51%, indicating stable dividend payments consistent with the past three years [2][6]

Financial Performance - Revenue for the year ended December 31, 2023, was HKD 32,090,207,000, a decrease of 14% compared to HKD 37,321,229,000 in 2022[2] - Profit attributable to equity holders was HKD 4,429,160,000, down 4% from HKD 4,601,939,000 in the previous year[2] - Basic and diluted earnings per share for equity holders was 72.10 HKD cents, compared to 74.91 HKD cents in 2022[4] - The final dividend per share was 8.0 HKD cents, down from 9.0 HKD cents in the previous year, with total annual dividends per share at 22.0 HKD cents compared to 24.0 HKD cents in 2022[2] - Gross profit for the year was HKD 13,811,291,000, slightly down from HKD 14,364,599,000 in 2022[4] - Total comprehensive income for the year was HKD 2,581,444,000, compared to a loss of HKD 3,061,903,000 in the previous year[6] - The company reported a comprehensive EBITDA of HKD 7,124,484,000 for the year, indicating a stable performance despite revenue declines[16] - The company's total liabilities increased from HKD 127,998,905,000 to HKD 123,659,603,000, showing a slight reduction in financial leverage[17] - The total tax expense for the year was HKD 1,827,333,000, an increase from HKD 1,747,983,000 in 2022, marking a rise of 4.5%[28] - Basic earnings attributable to equity holders for 2023 were HKD 4,429,160,000, down from HKD 4,601,939,000 in 2022, indicating a decrease of 3.7%[30] Revenue Breakdown - For the fiscal year ending December 31, 2023, the total revenue from external customers was HKD 37,321,229,000, with significant contributions from various segments[15] - The revenue from the Environmental Energy Projects segment was HKD 17,359,810,000, while the Environmental Water Projects segment generated HKD 6,704,684,000[15] - The total reported segment revenue for the year was HKD 38,692,566,000, indicating a strong performance across the business divisions[15] - Revenue from environmental energy project construction services was HKD 4,332,798,000, down from HKD 9,193,065,000 in the previous year, a decrease of about 52.8%[21] - Operating service revenue from environmental energy projects increased to HKD 9,241,305,000 from HKD 8,898,332,000, reflecting a growth of approximately 3.9%[21] - The total customer contract revenue decreased to HKD 26,863,704,000 from HKD 31,969,923,000, a decline of around 16%[21] - Revenue from environmental water project construction services was HKD 2,502,809,000, slightly down from HKD 2,668,060,000, a decrease of about 6.2%[21] - The company’s revenue from green environmental projects construction services decreased to HKD 660,645,000 from HKD 1,297,251,000, a decline of approximately 48.1%[21] Assets and Liabilities - Non-current assets totaled HKD 142,029,678,000, down from HKD 144,611,892,000 in 2022[7] - Current assets increased to HKD 47,153,146,000 from HKD 45,985,906,000 in the previous year[8] - Total liabilities decreased to HKD 123,660,603,000 from HKD 126,359,361,000 in 2022[8] - Net assets attributable to equity holders increased to HKD 65,523,221,000 from HKD 62,598,893,000 in the previous year[8] - The company's total assets as of December 31, 2023, were HKD 189,182,824,000, while total liabilities were HKD 123,659,603,000[17] - The group's debt-to-asset ratio as of December 31, 2023, was 65%, a decrease of 2 percentage points from 67% at the end of 2022[83] Dividends - The interim dividend per ordinary share for 2023 was 14.0 HK cents, down from 15.0 HK cents in 2022[29] - The proposed final dividend per ordinary share for 2023 is 8.0 HK cents, compared to 9.0 HK cents in 2022[29] - The board proposed a final dividend of HKD 0.08 per share for the year ending December 31, 2023, down from HKD 0.09 per share in 2022[96] - The annual general meeting will be held on May 30, 2024, to approve the proposed final dividend[97] Operational Highlights - The company has focused on optimizing its operational management system and reducing costs through digital transformation[41] - The company has made efforts to recover and manage various accounts receivable, negotiating new loan limits with banks[42] - The company has actively expanded financing channels and improved its financing tool portfolio, resulting in reduced financing costs and improved liquidity[42] - The company has engaged in various public welfare activities, with 216 environmental projects participating in public outreach efforts[52] - The company has received multiple awards, including being ranked first in the "2023 Top 50 Environmental Enterprises in China" for the fifth consecutive year[53] - The company has been recognized for its corporate governance and ESG performance, receiving multiple awards in sustainability and social responsibility[56] Environmental Initiatives - The company has implemented 191 waste-to-energy projects, including one O&M project and one EPCO project, with a designed daily processing capacity of 158,900 tons[45] - The company has expanded its overseas market presence in Germany, Poland, Vietnam, and Mauritius[45] - The company has signed multiple contracts for light asset services, with a total contract value of approximately RMB 3.244 billion[47] - The company processed 52,440,000 tons of municipal solid waste, generating 25,865,000,000 kWh of green electricity[50] - The company has achieved a total of 270,365,000 tons of municipal solid waste processed since 2005, providing 131,351,000,000 kWh of green electricity[51] - The company has been recognized as a component of the Dow Jones Sustainability Index for eight consecutive years, highlighting its commitment to sustainable development[56] Research and Development - The environmental research institute focused on solid waste, water treatment, and clean energy, establishing flexible research teams to explore hydrogen energy and energy storage technologies[75] - The company has engaged in various public welfare activities, with 216 environmental projects participating in public outreach efforts[52] - The company has received the "2023 Environmental Equipment Technology Innovation Award" for its water-cooled furnace technology, showcasing its leadership in environmental technology[55] Future Outlook - The group aims to focus on high-quality development and strategic growth in solid waste, water, and clean energy sectors in 2024[81] - The company plans to submit its financial statements for the fiscal year ending December 31, 2023, to the Companies Registry in due course[12]

Investment Rating - The report gives a "Buy" rating to the company [5] Core Viewpoints - The company is expected to see marginal improvements in 2024, with a valuation inflection point approaching [4] - The company is a leader in waste-to-energy and a comprehensive platform with multiple business layouts [4] - The company is transitioning from a phase of new project additions to an operational cash flow generation phase [4] - The company's income, asset, and liability structures are continuously optimizing, with free cash flow expected to turn positive in 2024 [4] - The company is a high-value investment target in the absolute return track [5] Company Overview - The company is the largest waste-to-energy operator in China and globally, with a daily waste incineration capacity of 130,100 tons as of the end of 2023 [4] - The company focuses on three major areas: solid waste, water, and clean energy [4] - The company has a strong technological foundation, with 1,778 authorized patents as of the first half of 2023 [20] Business Segments Environmental Energy - The company has a daily waste incineration capacity of 130,100 tons, ranking first in the industry [4] - 51.7% of the capacity is located in third- and fourth-tier cities and county markets as of the end of 2023 [4] - The segment contributed 56.0% of the company's revenue and 67.1% of gross profit in the first half of 2023 [4] Environmental Water - The company's wastewater treatment volume and price have both increased, with a compound growth rate of 8.3% from 2017 to 2022 [4] - The average treatment price increased from 1.23 RMB/ton in 2017 to 1.71 RMB/ton in 2022 [4] Green Environmental Protection - As of the first half of 2023, the company has 51 biomass comprehensive utilization projects in operation [4] - The transformation to heating has provided a good supplement to cash flow [4] Financial Performance - The company's operating income exceeded construction income for the first time in 2022 [4] - The proportion of operating income increased to 56.9% in the first half of 2023 [4] - The company's free cash flow is expected to turn positive in 2024 [4] - The company's net profit attributable to the parent company is expected to be 4.037 billion, 4.053 billion, and 4.134 billion HKD in 2023, 2024, and 2025, respectively [5] Valuation and Dividends - The company's PE ratio is 4.73x, 4.71x, and 4.62x for 2023, 2024, and 2025, respectively [5] - The company's dividend yield is 7.72% as of March 21, 2024, higher than industry peers [5]

Financial Performance - Revenue for the first half of 2023 was HK$16,297,167, a decrease of 24% compared to HK$21,448,683 in the same period of 2022[9]. - EBITDA for the same period increased by 5% to HK$7,376,488 from HK$7,047,794 in 2022[9]. - Profit attributable to equity holders was HK$2,784,923, a slight decrease of 1% from HK$2,811,148 in the previous year[9]. - Return on shareholders' equity improved to 5.82%, up from 5.51% in the first half of 2022, representing an increase of 0.31 percentage points[9]. - Total assets decreased by 1% to HK$189,423,150 from HK$190,597,798 at the end of 2022, while total liabilities decreased by 4% to HK$123,482,416[9]. - An interim dividend of HK14.0 cents per share was declared for the six months ended June 30, 2023, down from HK15.0 cents per share in 2022[25]. - The Group had cash on hand amounting to HK$8.871 billion as of June 30, 2023, indicating a healthy financial position[20]. - The Group's gearing ratio decreased to 65% as of June 30, 2023, down from 67% at the end of 2022, indicating improved financial stability[135]. Business Strategy and Development - The company is focusing on two major development directions: consolidating its industry-leading position and pursuing high-quality development through management enhancement[14]. - The three major business areas include solid waste, water-related business, and clean energy, with efforts to balance asset-light and asset-heavy businesses[14]. - The company aims to optimize its revenue structure and implement cost reduction measures to enhance efficiency[14]. - The Group's strategic focus remains on solid waste, water, and clean energy sectors, enhancing management and operational efficiency[18]. - The Group is committed to strengthening technological innovation and digital management to drive high-quality development[18]. - The company aims to transform into a technology-based enterprise and enhance its market expansion and technological innovation efforts[133]. - The company is committed to high-quality development to celebrate its 30th anniversary and 20th anniversary in environmental protection[134]. Project and Operational Updates - As of June 30, 2023, the Group has a presence in over 220 cities across 26 regions in China and has invested in 578 environmental protection projects with a total investment of approximately RMB 158.044 billion[27]. - In the first half of 2023, the Group secured 25 new projects with a total investment of approximately RMB 3.122 billion, focusing on waste-to-energy, wastewater treatment, and biomass utilization[28]. - The Group completed construction and commenced operation for 21 projects in the first half of 2023, with 35 new projects starting construction[33]. - The Group processed 25,634,000 tonnes of household waste, generating 12,986,000,000 kWh of green electricity, equivalent to the annual electricity consumption of 10,821,000 households[41]. - The Group treated 845,823,000 m³ of wastewater, reducing Chemical Oxygen Demand (COD) discharge by 407,000 tonnes[41]. - The Group's waste-to-energy projects improved operational efficiency, resulting in increased waste intake and electricity generation compared to the same period last year[32]. Environmental and Social Responsibility - The environmental protection industry is being empowered by China's "Dual Carbons" goals, promoting high-quality development and industry transformation[11]. - The Group has been recognized for its social responsibility efforts, winning multiple awards for its environmental projects[52]. - The Group received multiple awards, including being ranked at the top of the Brand Value List for Listed Environmental Protection Companies in 2022[48]. - Everbright Water was recognized as one of the Top Ten Influential Enterprises in China's Water Industry for the sixth consecutive year[48]. Financial Management and Risk - The Group actively expanded its financing channels, issuing a total of RMB3 billion in medium-term notes to repay interest-bearing debts and support working capital[22][24]. - The Group had banking facilities of HK$101.83 billion, of which HK$24.23 billion remained unutilized as of June 30, 2023[135]. - The Group is committed to a comprehensive risk management culture, continuously updating its risk management system to enhance its effectiveness[141]. - The Group is facing increased accounts receivable and overdue accounts due to impaired government payment capabilities and new national subsidy policies[151]. Technological Innovation - The company is enhancing its technology research and development platforms and improving digital management proficiency[14]. - The Group's envirotech sector focused on key research areas including household waste treatment and agricultural biomass utilisation, aiming to become a first-class technological innovation center[98][99]. - The Group established a joint "Engineering and Technology Centre" with Qingdao University of Technology for new pollutant monitoring and control related to household waste treatment[99]. - The automated combustion control and automated frequency control technologies have been applied to 6 projects, with plans for another 30 projects[105]. Compliance and Safety - The Company has developed a standardized management system for safety and environmental management, enhancing operational safety through a grading assessment system[155]. - The Group has established a comprehensive safety and environmental management system, continuing to implement relevant management policies in the first half of 2023[187]. - The implementation of the Production Safety Law has refined regulatory requirements, imposing higher standards for operational compliance[154]. - The Group's safety production responsibility system clarifies management responsibilities and assessment standards for safety and environmental management[189].

Financial Performance - Revenue for the six months ended June 30, 2023, was HKD 16,297,167,000, a decrease of 24% compared to HKD 21,448,683,000 for the same period in 2022[2] - EBITDA for the same period was HKD 7,376,488,000, an increase of 5% from HKD 7,047,794,000 in 2022[2] - Profit before tax increased by 4% to HKD 4,505,649,000 from HKD 4,326,092,000 year-on-year[2] - Profit attributable to equity holders of the company was HKD 2,784,923,000, a decrease of 1% compared to HKD 2,811,148,000 in the previous year[2] - The interim dividend per share was HKD 0.14, down from HKD 0.15 in 2022[2] - Gross profit for the period was HKD 7,193,433,000, compared to HKD 7,628,811,000 in the same period last year[3] - Operating profit from operating activities was HKD 6,192,000, an increase from HKD 5,916,663 in the previous year[3] - Total comprehensive income for the period was HKD 1,905,465,000, compared to a loss of HKD 650,745,000 in the same period last year[4] Assets and Liabilities - Non-current assets totaled HKD 143,108,105,000 as of June 30, 2023, compared to HKD 144,611,892,000 at the end of 2022[5] - Current assets amounted to HKD 46,315,045,000, slightly up from HKD 45,985,906,000 at the end of the previous year[5] - As of June 30, 2023, total current liabilities decreased to HKD 40,705,011 from HKD 42,813,049, representing a reduction of approximately 4.9%[6] - Current assets net increased significantly to HKD 5,610,034 from HKD 3,172,857, marking an increase of about 76.7%[6] - Total assets less current liabilities rose to HKD 148,718,139 from HKD 147,784,749, reflecting a growth of approximately 0.6%[6] - Non-current liabilities decreased to HKD 82,777,405 from HKD 85,185,856, indicating a decline of about 4.8%[6] - The company's equity attributable to equity holders increased to HKD 17,329,537 from HKD 30,044,571, showing a rise of approximately 57.5%[6] - The total equity of the company reached HKD 65,940,734, up from HKD 62,598,893, which is an increase of about 5.6%[6] Revenue Segments - The group reported a total revenue of HKD 22,035,227,000 for the six months ended June 30, 2023, compared to HKD 16,656,453,000 for the same period in the previous year, representing a growth of approximately 32.3%[17] - Revenue from environmental energy project construction services was HKD 2,656,834,000, down from HKD 6,953,356,000 in the previous year, a decrease of about 61.8%[25] - Revenue from environmental water project construction services was HKD 950,232,000, compared to HKD 1,436,836,000 in the prior year, reflecting a decline of approximately 33.9%[25] - Revenue from local government agencies in China for environmental energy projects, water projects, and green projects totaled HKD 13,681,661,000, down from HKD 19,074,471,000 in the same period last year, a decrease of approximately 28.5%[25] Financial Costs and Expenses - The group incurred financial expenses of HKD 1,739,255,000, compared to HKD 1,684,504,000 in the previous period, indicating an increase in financial costs[19] - Depreciation and amortization expenses, including unallocated portions, amounted to HKD 1,131,584,000, up from HKD 1,037,198,000 in the prior period[19] - Interest expenses for bank and other loans amounted to HKD 1,509,945,000 for the six months ended June 30, 2023, an increase from HKD 1,481,788,000 in the previous year[28] Investments and Projects - The company invested in 25 new projects with a total investment of approximately RMB 3.122 billion, focusing on waste-to-energy and wastewater treatment[48] - The company has a total of 188 waste-to-energy projects, with a designed capacity to process 157,200 tons of municipal waste per day[47] - The company has signed contracts for light asset projects totaling approximately RMB 2.014 billion[48] - The company has constructed and put into operation 21 projects in the first half of 2023, with 35 new projects commenced[49] Environmental and Social Responsibility - The group has received multiple awards, including the top position in the "2022 Environmental Industry Listed Company Brand Value List" and recognition as one of China's "Top Ten Influential Water Companies" for six consecutive years[54] - The group has been recognized for its social responsibility efforts, receiving the "Annual Responsibility Brand Award" for nine consecutive years[55] - The group has actively participated in various public welfare activities, promoting ecological protection and sustainable development concepts[52] Corporate Governance and Compliance - The company maintains high standards of corporate governance, adhering to the Corporate Governance Code and continuously enhancing its governance practices[96] - The company has established a comprehensive safety and environmental management system, continuously revising and implementing relevant management policies[94] - The company’s waste-to-energy projects comply with all applicable national environmental regulations, with emissions monitoring indicators exceeding EU standards[94] Future Outlook and Strategy - The company aims to transform into a world-class comprehensive environmental service provider, focusing on market development, technological innovation, and cost reduction[83] - The company anticipates a stable macroeconomic environment for the environmental protection industry, supported by government policies aimed at promoting green economic development[82]

Company Overview - Everbright Environment has become the largest environmental enterprise in China and a leading player in Asia's environmental protection industry since shifting its focus to this sector in 2003[3]. - The company operates in 220 cities across 26 provinces and has expanded its business to international markets including Germany, Poland, Vietnam, and Mauritius[4]. - Everbright Environment has been ranked first among the "Top Ten Influential Solid Waste Treatment Enterprises in China" for 12 consecutive years and has been included in the MSCI China Index for ten consecutive years[5]. - The company reported significant achievements in sustainability, including being a constituent member of the Dow Jones Sustainability Indices for seven years running and receiving the Achievement of Net-Zero Certificate in 2022[5]. - Everbright Environment focuses on three core areas: solid waste, water-related business, and clean energy, with a comprehensive range of services including waste-to-energy and environmental remediation[4]. Financial Performance - Revenue decreased by 25% to HK$37,321,229, down from HK$49,895,384 in the previous year[11]. - EBITDA declined by 15% to HK$12,841,787, compared to HK$15,027,003 in 2021[11]. - Profit attributable to equity holders dropped by 32% to HK$4,601,939 from HK$6,804,099[11]. - Return on shareholders' equity fell to 9.28%, a decrease of 4.77 percentage points from 14.05%[11]. - Total assets decreased by 5% to HK$190,597,798, down from HK$200,235,628[11]. - Total liabilities reduced by 6% to HK$127,998,905 from HK$135,893,406[11]. - The gearing ratio improved slightly to 67%, down by 1 percentage point from 68%[11]. - The current ratio decreased to 107%, a drop of 17 percentage points from 124%[11]. Strategic Initiatives - The company aims to create better investment value while undertaking more social responsibility, reflecting its commitment to ecological and environmental protection[5]. - The Group's strategic focus on innovation and corporate management proficiency is expected to drive future growth and development[34]. - The Group's commitment to the "Dual Carbons" strategy is anticipated to provide substantial growth opportunities in the environmental protection industry[26]. - The Group actively promoted project investment and operation in key regions, including the Yangtze River Economic Belt and Hainan Free Trade Zone, aligning with national strategic developments[29]. Operational Achievements - In 2022, China Everbright Environment Group Limited achieved a record high of 385 patents granted, reflecting significant investment in technological research and innovation[30]. - The Group's operational service revenue surpassed construction service revenue for the first time, indicating improved operational efficiency[28]. - The Group processed 48,968,000 tonnes of household waste, generating 24,762,121,000 kWh of green electricity, sufficient to meet the annual needs of 20,635,000 households, while saving 9,905,000 tonnes of standard coal and reducing CO2 emissions by 20,463,000 tonnes[68]. - The Group completed 39 operational projects and 1 completed project in 2022, with 44 new projects initiated, including 12 EPC projects and 8 new environmental restoration services[64]. Environmental Impact - The Group's technologies in solid waste treatment and leachate treatment were assessed to have reached internationally advanced levels by authoritative experts[31]. - The Group's environmental protection projects received over 20 honorary titles at various levels in 2022, promoting community engagement in sustainable development[73]. - The Group's biomass integrated utilization projects benefited over 10 million farmers and provided job opportunities to nearly 5,000 people through a stable supply of biomass raw materials[75]. - The Group completed a pilot project on greenhouse gas emissions monitoring and participated in drafting national carbon accounting standards, enhancing its carbon reduction strategies[70]. Corporate Governance - The Group emphasizes high-quality corporate governance as a cornerstone for long-term value creation and sustainable development[199]. - The Group adheres to integrity and pragmatism in its management principles, promoting an integrity-oriented corporate culture[200]. - The Group has developed various policies to enhance compliance and ethical behavior among employees, including anti-corruption and anti-bribery measures[200]. - The Group actively improves transparency and accountability through a series of rules, regulations, and policies[199]. Challenges and Risks - The principal risks identified for 2022 included accounts receivable risk, strategic transformation and market competition risk, and environmental compliance risk[167]. - The company faced difficulties in recruiting and retaining talent, particularly for projects in remote areas, which could negatively impact operational stability[174]. - The risk level of environmental compliance and safety management remained unchanged, highlighting ongoing challenges in meeting stringent regulations[173]. Future Outlook - The Group aims to achieve five major transformations to become a world-class ecological and environmental management group[146]. - The company is expanding into photovoltaic power, energy storage, and micro-grid projects as part of its business transformation strategy[181]. - The company has initiated pilot projects for carbon asset development and low-carbon sewage treatment plants, along with research on carbon capture technologies[181].

Financial Performance - Total revenue for the year ended December 31, 2022, was HKD 37,321,229,000, a decrease of 25% compared to HKD 49,895,384,000 in 2021[2] - EBITDA for the year was HKD 12,841,787,000, down 15% from HKD 15,027,003,000 in the previous year[2] - Profit attributable to equity holders was HKD 4,601,939,000, representing a 32% decline from HKD 6,804,099,000 in 2021[2] - Gross profit for the year was HKD 14,364,599,000, down from HKD 16,463,382,000 in 2021[3] - Operating profit for the year was HKD 10,599,939,000, a decrease from HKD 13,226,825,000 in the previous year[3] - Total comprehensive income for the year was HKD (3,061,903,000), compared to HKD 10,606,183,000 in 2021[5] - The adjusted EBITDA for the reporting segments was HKD 9,056,301 thousand in 2022, compared to HKD 10,225,664 thousand in 2021, reflecting a decrease of about 11.4%[20] - The company reported a net loss of HKD 1,626,964 thousand in the current year, compared to a loss of HKD 1,353,568 thousand in the previous year, indicating a worsening of approximately 20.2%[22] - The company’s financial expenses increased to HKD 3,488,268 thousand in 2022 from HKD 3,079,448 thousand in 2021, representing an increase of approximately 13.3%[22] - The company achieved a net profit attributable to shareholders of HKD 5,065,735,000, a decrease of 15% from 2021, primarily due to reduced construction project numbers and a one-time goodwill impairment[77] Dividends - The final dividend per share was 9.0 HKD cents, down from 15.0 HKD cents in the previous year, with total annual dividends per share at 24.0 HKD cents compared to 34.0 HKD cents in 2021[2] - The company declared an interim dividend of HKD 0.15 per share for 2022, down from HKD 0.19 in 2021, totaling HKD 921,446,000 compared to HKD 1,167,165,000 in the previous year[39] - The proposed final dividend for 2022 is HKD 0.09 per share, a decrease from HKD 0.15 in 2021, amounting to HKD 552,868,000 compared to HKD 921,446,000 in the prior year[39] - The board proposed a final dividend of HKD 0.09 per share for the year, down from HKD 0.15 per share in 2021, resulting in a total annual dividend of HKD 0.24 per share[58] Assets and Liabilities - Total assets as of December 31, 2022, were HKD 62,598,893,000, down from HKD 64,342,222,000 in 2021[7] - Current liabilities totaled HKD 42,813,049,000, an increase from HKD 39,768,402,000 in the previous year[7] - Net cash and cash equivalents decreased to HKD 10,591,242,000 from HKD 15,046,943,000 in 2021[6] - Total assets as of December 31, 2022, amounted to HKD 190,597,798 thousand, down from HKD 200,235,628 thousand in 2021, indicating a reduction of approximately 4.3%[27] - The total liabilities for the company were HKD 127,998,905 thousand in 2022, compared to HKD 135,893,406 thousand in 2021, showing a decrease of around 5.5%[27] - The total contract assets as of December 31, 2022, were HKD 109,430,350,000, a decrease from HKD 113,878,855,000 in 2021[41] - The total amount of accounts receivable, other receivables, deposits, and prepayments was HKD 23,582,144,000 in 2022, compared to HKD 24,215,103,000 in 2021[44] - The overdue amount of accounts receivable increased to HKD 10,433,438,000 in 2022 from HKD 7,286,684,000 in 2021[48] - The total amount of accounts payable related to construction projects under BOT, BOO, and TOT arrangements was HKD 11,096,878,000 in 2022, down from HKD 14,354,194,000 in 2021, a decrease of about 23%[52] Business Segments and Operations - The group has redefined its business segments to better manage strategic direction, with some financial data previously classified under "Other" now categorized under "Environmental Energy Projects Construction and Operation"[13] - The group reported multiple operating segments, including Environmental Energy Projects, Environmental Water Projects, and Green Environmental Projects, generating revenue from construction and operational services[11][12] - The group is engaged in various environmental projects, including waste-to-energy plants and water treatment facilities, contributing to its revenue streams[11][12] - Revenue from environmental energy project construction and operation services amounted to HKD 9,193,065,000 and HKD 8,898,332,000 respectively, showing a decline from HKD 21,932,588,000 and HKD 7,827,908,000 in the previous year[31] - Total revenue from environmental projects (energy, water, and green) was HKD 32,672,072,000, down 28.7% from HKD 45,853,797,000 in 2021[31] Environmental Impact and Initiatives - The group processed 48,968,000 tons of municipal solid waste, generating 24,762,121,000 kWh of green electricity, sufficient to power 20,635,000 households[63] - The group treated 1,770,260,000 cubic meters of wastewater, significantly reducing chemical oxygen demand (COD) emissions[63] - The group has made significant progress in environmental contributions, including a reduction of 20,463,000 tons of carbon dioxide emissions through waste treatment and recycling efforts[63] - Cumulative waste treatment volume reached 217,925,000 tons, providing green electricity equivalent to 105,486,150,000 kWh, enough to supply 87,905,000 households for a year, saving 42,195,000 tons of standard coal and reducing CO2 emissions by 99,067,000 tons[64] - The company processed 1,771,000 tons of hazardous waste and 34,789,000 tons of agricultural waste, along with 14,732,562,000 cubic meters of wastewater, reducing COD emissions by 5,776,000 tons[64] Corporate Governance and Compliance - The board of directors has adopted the Corporate Governance Code as its standard for corporate governance practices[113] - The company emphasizes high-level corporate governance as essential for sustainable development and stakeholder interests[113] - The company continuously reviews and enhances its corporate governance practices to align with business operations and growth[113] - The company actively discloses project emission data and environmental management information on its website, connecting to the national ecological environment department's monitoring platform[111] Future Outlook and Strategy - The company continues to explore opportunities for market expansion and new project developments in environmental services[31] - The group plans to strengthen market expansion and enhance development efficiency while focusing on high-quality development in 2023[98] - The group aims to transition from high-speed growth to high-quality development, emphasizing operational revenue over construction service revenue[98]