环保行业2024半年报总结：长坡厚雪，运营为王能者居之

Industry Investment Rating - The report maintains an "Overweight" rating for the environmental protection industry [1] Core Views - The environmental protection industry faced pressure in H1 2024, with a slight decline in overall profitability [2] - The industry's operating cash flow increased significantly, while investment cash flow expenditures rose [2] - Sub-sectors showed divergent performance, with solid waste treatment and water operations performing well, while energy conservation lagged [3] Industry Overview - In H1 2024, the environmental protection industry's total revenue was 167.04 billion yuan, a year-on-year increase of 2.6%, while net profit attributable to the parent company was 12.3 billion yuan, a year-on-year decrease of 13.2% [2] - The industry's gross profit margin was 24.5%, down 0.3 percentage points year-on-year, and the net profit margin was 8.1%, down 1.4 percentage points year-on-year [2] - The industry's operating cash flow increased by 34.9% year-on-year to 7.73 billion yuan, while investment cash flow outflows increased by 25.3% year-on-year to 29.79 billion yuan [2] Sub-sector Analysis Solid Waste Treatment - The solid waste treatment sector achieved revenue of 79.97 billion yuan in H1 2024, a year-on-year increase of 13.9%, and net profit attributable to the parent company of 6.87 billion yuan, a year-on-year increase of 15.7% [23] - The sector's gross profit margin was 23.0%, down 0.3 percentage points year-on-year, and the net profit margin was 9.0%, down 0.1 percentage points year-on-year [25] Water Operations - The water operations sector achieved revenue of 35.36 billion yuan in H1 2024, a year-on-year increase of 3.5%, and net profit attributable to the parent company of 5.31 billion yuan, a year-on-year decrease of 2.4% [27] - The sector's gross profit margin was 35.1%, up 1.2 percentage points year-on-year, and the net profit margin was 16.7%, down 0.7 percentage points year-on-year [29] Monitoring - The monitoring sector achieved revenue of 4.4 billion yuan in H1 2024, a year-on-year decrease of 2.4%, and net profit attributable to the parent company of 160 million yuan, a year-on-year increase of 45.0% [31] - The sector's gross profit margin was 39.4%, up 0.3 percentage points year-on-year [33] Water Treatment - The water treatment sector achieved revenue of 16.36 billion yuan in H1 2024, a year-on-year decrease of 1.4%, and net profit attributable to the parent company of 710 million yuan, a year-on-year decrease of 42.0% [34] - The sector's gross profit margin was 26.7%, down 0.2 percentage points year-on-year [36] Air Pollution Control - The air pollution control sector achieved revenue of 16.21 billion yuan in H1 2024, a year-on-year increase of 3.6%, and net profit attributable to the parent company of 780 million yuan, a year-on-year decrease of 15.7% [39] - The sector's gross profit margin was 21.4%, down 0.3 percentage points year-on-year [41] Energy Conservation - The energy conservation sector achieved revenue of 14.74 billion yuan in H1 2024, a year-on-year decrease of 32.1%, and net profit attributable to the parent company of -1.54 billion yuan [43] - The sector's gross profit margin was 3.9%, down 9.1 percentage points year-on-year [44] Investment Recommendations - The report recommends companies with strong project pipelines and high technical barriers in the hazardous waste treatment sector, such as High Energy Environment and Huicheng Environmental [48] - It also recommends low-valuation, high-dividend state-owned enterprises with excellent management and sustained growth, such as Hongcheng Environment and Hanblue Environment [49][50]