Investment Rating - The report maintains a rating of "Buy" for the company [5]. Core Views - The company experienced a 7.6% year-on-year increase in waste disposal volume in H1 2024, indicating stable operations. Capital expenditure was reduced to HKD 460 million, and net cash flow from operating activities improved to HKD 613 million [4][5]. - The report highlights a significant decline in revenue and net profit for H1 2024, with revenue at HKD 2.13 billion (down 28.5% year-on-year) and net profit at HKD 445 million (down 27.1% year-on-year). This decline is attributed to the absence of new construction projects, which previously contributed HKD 999 million in revenue in the same period last year [5]. - The gross profit margin improved to 48.5%, up 10.5 percentage points year-on-year, primarily due to the exclusion of low-margin construction revenue and an increase in the proportion of high-margin electricity sales and waste treatment operations [5]. - The company’s debt-to-asset ratio decreased by 1.1 percentage points to 63.2%, and the total borrowing cost for H1 2024 was HKD 347 million, an increase of 4.8% year-on-year, indicating potential for reduced financial expenses in the future [5]. Summary by Sections Financial Performance - In H1 2024, the company achieved revenue of HKD 2.13 billion, a decrease of 28.5% year-on-year, and a net profit of HKD 445 million, down 27.1% year-on-year. The decline is mainly due to the lack of new construction revenue [5]. - The gross profit margin was reported at 48.5%, reflecting a significant improvement due to a shift towards higher-margin services [5]. - The company’s capital expenditure for H1 2024 was HKD 460 million, down from HKD 1.1 billion in the same period last year, indicating a reduction in capital spending [5]. Operational Highlights - The company’s waste disposal volume increased by 7.6% year-on-year to 8.7 million tons in H1 2024, demonstrating stable operational performance [5]. - Core business revenues from electricity sales, waste treatment fees, and sanitation services totaled HKD 2.04 billion, up 7.9% year-on-year [5]. Strategic Developments - The report mentions that Hanlan Environment plans to privatize and acquire the company, which could enhance operational synergies and expand market presence [5].
粤丰环保：2024年中报点评：资本开支缩减，现金流改善