Grandblue Environment (600323) 国泰君安·2024-07-07 22:31Investment Rating - The report maintains an "Overweight" rating for the company [6][14]. Core Views - The company is planning to privatize the Hong Kong-listed company Yuefeng Environmental through its indirect subsidiary Hanlan (Hong Kong), marking a significant step in fulfilling its "14th Five-Year" strategic goals [6][14]. - After the acquisition, the company's waste incineration capacity will rank among the top three in the industry, enhancing its competitive position [6][14]. - The company forecasts net profits of 1.55 billion, 1.69 billion, and 1.78 billion yuan for 2024-2026, with corresponding EPS of 1.90, 2.07, and 2.18 yuan, maintaining a target price of 33.49 yuan [6][14]. Summary by Sections Company Announcement - The company is in the process of privatizing Yuefeng Environmental, aiming to hold approximately 92.77% of its shares post-transaction [6]. - The indicative cancellation price is set at 4.90 HKD per share, with the total consideration for 100% equity amounting to 11.954 billion HKD, representing a 21% premium over the market value as of July 5, 2024 [6]. Market Position - Yuefeng Environmental is a leading player in Guangdong's waste incineration market, holding a 73% market share in Dongguan and 21% in Guangdong, with a total incineration capacity of 54,540 tons per day [6]. - The acquisition will increase the company's total incineration capacity to 70,000 tons per day, positioning it among the top three in the industry [6]. Financial Outlook - The company reported a net cash flow from operating activities of 2.482 billion yuan in 2023, with a dividend payout ratio of 27.38% [6]. - It plans to increase cash dividends by no less than 10% annually from 2024 to 2026, indicating potential for significant dividend growth post-acquisition [6].