Group 1 - The core viewpoint of the report is that Bank of America Securities maintains a "Buy" rating for China Everbright Environment (00257) due to expected significant growth in free cash flow (FCF) and increasing dividends [1] - The expected FCF for last year is projected to double to HKD 9 billion, supported by a decrease in capital expenditures during a down cycle [1] - The company is anticipated to see an average compound annual growth rate (CAGR) of 11% in earnings per share from 2024 to 2027, with a proposed A-share issuance potentially leading to a revaluation [1] Group 2 - The target price for the company has been raised from HKD 5.3 to HKD 6.2 based on discounted cash flow analysis, with the current price reflecting an attractive forecasted dividend yield of 5.7% [1] - The company received RMB 3.6 billion in renewable energy subsidies last year, significantly higher than the RMB 1.9 billion expected for 2024, contributing to the anticipated increase in FCF [1] - Operating profit is expected to grow steadily, with accounts receivable showing no deterioration [1] Group 3 - The company has demonstrated discipline in project bidding, opting not to bid on seven waste-to-energy projects in Indonesia due to failure to meet internal return tests [2] - Capital expenditure forecasts for 2025 to 2027 have been reduced to between HKD 500 million and HKD 700 million annually, reflecting the company's disciplined approach to new investments [2] - Earnings per share estimates for 2025 to 2027 have been lowered by 7% to 12% to account for reduced construction profits [2]
美银证券：升光大环境目标价至6.2港元 评级“买入”