环保化债策略专题（三）：固废应收账款梳理——重视估值弹性打开

Investment Rating - The industry investment rating is "Buy" [2] Core Insights - The report highlights the introduction of the most significant debt reduction policy in recent years, focusing on the structure and aging of waste receivables, which is expected to enhance the valuation elasticity of waste assets [2][9] - The central government emphasizes resolving corporate receivables, with the Ministry of Finance set to implement a substantial debt reduction policy, which is anticipated to improve the valuation elasticity of waste operation assets [2][9] - The report indicates that the waste receivables account for approximately 38% to 60% of annual revenue, with about 70% of these receivables being due within one year [2][18] - The cash flow from waste management companies remains healthy, with a three-year cumulative collection rate of approximately 93% to 100% [2][9] Summary by Sections 1. Debt Reduction Policy and Valuation Elasticity - The Ministry of Finance is expected to introduce a significant debt reduction policy, with a total debt limit of 1.2 trillion CNY allocated for 2024 to support local governments in resolving existing debt risks and clearing overdue corporate payments [9][10] - The report suggests that the debt reduction measures will alleviate concerns regarding local governments' historical receivables and future payment capabilities, thereby enhancing the valuation elasticity of waste assets [2][9] 2. Receivables Analysis: Total, Aging, and Structural Changes - Waste receivables and contract assets constitute 38% to 60% of revenue, with receivables due within one year accounting for nearly 70% [2][18] - The report identifies that local government debts are a core reason for the growth in receivables among companies [2][18] 3. Collection Exploration: Emphasizing "People's Livelihood" - The report presents a collection model indicating that while the collection rate has slightly declined, the three-year collection rate remains robust at approximately 93% to 100% [2][9] - The report emphasizes the low proportion of waste disposal fees in local fiscal expenditures, highlighting the significant social importance of the waste management sector [2][9] 4. Focus on Strong Cash Flow Generation and Increasing Dividend Capacity - The report notes that the waste management sector has a high depreciation ratio, with an average net cash ratio of 1.8, indicating strong cash flow generation capabilities [2][9] - The sector's free cash flow is improving, although it has not yet been fully reflected in valuations [2][9] 5. Investment Recommendations - The report recommends focusing on companies such as Huanlan Environment, which benefits from both waste and gas operations, and is expected to see significant cash flow improvements [2][5] - Other recommended companies include China Everbright Environment, Sanfeng Environment, and Conch Venture, all of which are expected to improve their cash flow and dividend stability [2][5]