环保2024三季报总结：业绩短期承压，风物长宜放眼量

Industry Investment Rating - The report maintains an Overweight rating for the environmental protection industry [5] Core Views - The environmental protection industry faced short-term pressure in 2024 Q1-Q3, with overall revenue declining by 1.3% YoY to 2495.9 billion yuan, and net profit attributable to shareholders dropping by 14.2% YoY to 189.7 billion yuan [2] - The industry's profitability declined slightly, with gross margin at 24.8% (down 0.1pct YoY) and net margin at 8.3% (down 1.1pct YoY) [2] - Operating cash flow increased significantly by 20.5% YoY to 194.0 billion yuan, while investment cash flow outflows rose by 4.1% YoY to 413.7 billion yuan [3] - Sub-sectors showed significant divergence, with solid waste treatment performing well, while energy conservation and water treatment sectors underperformed [4] Sub-Sector Analysis Solid Waste Treatment - Solid waste treatment sector revenue grew by 10.7% YoY to 1195.3 billion yuan, with net profit increasing by 1.7% YoY to 88.2 billion yuan [4] - The sector benefited from stable operations of waste-to-energy projects and improved profitability [4] - Operating cash flow surged by 56.0% YoY to 120.6 billion yuan, driven by cost control and policy support [27] Water Utilities - Water utilities sector revenue remained stable at 533.7 billion yuan, with net profit increasing by 18.1% YoY to 104.0 billion yuan [30] - Gross margin improved to 35.9% (up 1.6pct YoY), while operating cash flow decreased by 9.7% YoY to 74.3 billion yuan [34] Monitoring - The monitoring sector revenue declined by 4.6% YoY to 66.3 billion yuan, but net profit increased by 52.0% YoY to 2.5 billion yuan [37] - Operating cash flow turned positive, reaching 0.8 billion yuan, compared to -5.2 billion yuan in the same period last year [39] Water Treatment - Water treatment sector revenue decreased by 8.1% YoY to 241.3 billion yuan, with net profit dropping by 59.6% YoY to 7.5 billion yuan [40] - Operating cash flow declined to 5.5 billion yuan, down from 6.9 billion yuan in the previous year [44] Air Pollution Control - Air pollution control sector revenue decreased by 1.6% YoY to 240.9 billion yuan, with net profit dropping by 22.9% YoY to 10.4 billion yuan [49] - Operating cash flow increased significantly by 130.2% YoY to 12.8 billion yuan [51] Energy Conservation - Energy conservation sector revenue declined sharply by 35.3% YoY to 218.4 billion yuan, with net profit turning to a loss of -22.9 billion yuan [55] - Operating cash flow dropped significantly to -20.0 billion yuan, down 240.7% YoY [58] Investment Recommendations - The report recommends companies benefiting from carbon neutrality and resource recycling, such as High Energy Environment and Huicheng Environmental [62][63] - It also highlights state-owned enterprises with high dividends and improved cash flow, such as Hongcheng Environment and Hanblue Environment, which are expected to benefit from debt resolution policies [64][65]