Sanfeng Environment(601827) 国泰君安·2024-08-27 06:12Investment Rating - The report maintains an "Accumulate" rating for the company, with a target price raised to 11.25 RMB from the previous 8.76 RMB, while the current price is 8.55 RMB [1][4]. Core Views - The company's performance in the first half of 2024 met expectations, demonstrating stable operations and maintaining industry leadership, with active expansion in international business [2][4]. Financial Performance Summary - For H1 2024, the company achieved revenue of 3.132 billion RMB, a year-on-year increase of 5%, and a net profit attributable to shareholders of 666 million RMB, also up 5% year-on-year. The net profit excluding non-recurring items was 662 million RMB, reflecting a 9% increase [4]. - In Q2 2024, the company reported revenue of 1.579 billion RMB, with a net profit excluding non-recurring items of 276 million RMB, marking a 7% year-on-year growth [4]. - The company's EPC construction revenue decreased significantly by 82% to 122 million RMB due to a reduction in ongoing projects, while equipment sales revenue surged by 108% to 929 million RMB. Operating revenue grew steadily by 11% to 1.971 billion RMB [4]. - The gross margin improved by 2.41 percentage points to 34.38%, while the net profit margin remained stable at 22.42% [4]. Operational Highlights - As of the end of H1 2024, the company had 41,500 tons of invested and controlled projects and 15,850 tons of joint ventures. The waste disposal volume of controlled projects increased by 11% year-on-year to 7.535 million tons, and steam sales volume rose by 32% to 470,000 tons [4]. - The average waste-to-energy conversion rate for the company's projects was 413.5 kWh/ton, maintaining industry-leading levels [4]. - The company actively expanded its international business, signing a strategic cooperation framework agreement with Suez Group in France and renewing a licensing agreement with Martin in Germany [4]. Cash Flow and Capital Expenditure - Capital expenditure in H1 2024 was 370 million RMB, down from 648 million RMB in the same period of 2023, indicating a clear downward trend in capital spending [4]. - The net cash flow from operating activities was 1.129 billion RMB, a 27% year-on-year increase, indicating sufficient cash flow [4].