城发环境：固废运营增长，高速公路、工程承压

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 16.48 [1][7]. Core Views - The report highlights a decline in revenue and net profit for the first half of 2024, with revenue at RMB 28.91 billion (down 10.66% year-on-year) and net profit at RMB 4.90 billion (down 17.44% year-on-year) [1]. - The report anticipates a decrease in environmental engineering revenue forecasts and projects net profits for 2024-2026 to be RMB 10.79 billion, RMB 11.73 billion, and RMB 12.78 billion respectively [1]. - The report emphasizes the growth in solid waste operations, while the highway and engineering segments are under pressure [1][2]. Summary by Sections Financial Performance - In H1 2024, the company achieved revenue of RMB 28.91 billion, with a year-on-year decrease of 10.66%. The net profit attributable to the parent company was RMB 4.90 billion, down 17.44% year-on-year [1]. - The second quarter saw revenue of RMB 15.34 billion, a year-on-year decrease of 10.59% but a quarter-on-quarter increase of 13.02% [1]. Business Segments - Solid Waste Business: Revenue for H1 2024 was RMB 16.09 billion, up 24.65% year-on-year, with a gross margin of 43.44% [2]. - Highway Business: Revenue decreased by 10.28% year-on-year to RMB 6.41 billion, with a gross margin of 54.82% [2]. - Environmental Solution Integration Services: Revenue fell by 62.92% year-on-year to RMB 3.46 billion, with a gross margin of 17.89% [2]. Operational Highlights - The company has a total operational capacity of 28,550 tons/day in the waste-to-energy sector, with 32 projects in operation as of June 30, 2024 [3]. - The amount of waste processed in H1 2024 was 573.2 million tons, a year-on-year increase of 17.9%, and the electricity generated was 1.4 billion kWh, up 16.4% year-on-year [3]. Highway Operations - The average daily traffic volume on highways decreased by 3.06% year-on-year to 43,200 vehicles, and toll revenue fell by 8.29% year-on-year to RMB 6.47 billion [4].