Investment Rating - The report assigns a "Buy" rating to the company with a target price of 15.24 CNY, compared to the current price of 14.45 CNY [2][3][4] Core Views - The company has a diversified business layout in water and solid waste treatment, with a historical CAGR of 44.1% in revenue and 32.9% in net profit from 2019 to 2023 [11] - Large orders in environmental protection projects, particularly in BOT and EPC, support future growth, with contract amounts reaching 3.296 billion CNY in 2023 for BOT projects and 477 million CNY for EPC projects [11] - The company is exploring new business opportunities in renewable energy, including a 1GW photovoltaic project in Wusu City and a hydrogen energy equipment project in Yangzhou [11] Financial Performance - Revenue is expected to grow from 2.552 billion CNY in 2024E to 4.414 billion CNY in 2026E, with a CAGR of 31.6% [10] - Net profit is projected to increase from 344 million CNY in 2024E to 594 million CNY in 2026E, with a CAGR of 29.8% [10] - The company's ROE is expected to rise from 10.9% in 2024E to 15.0% in 2026E, indicating improving profitability [10] Business Segments - The engineering construction segment contributes 81% of total revenue in 2023, driven by large-scale BOT and EPC projects [53] - The company's BOT projects are expected to generate stable cash flow post-construction, with BOT revenue increasing from 0 in 2021 to 792 million CNY in 2023 [64] - The company is expanding into renewable energy, with a 1GW photovoltaic project in Wusu City and a hydrogen energy equipment project in Yangzhou, aiming to diversify its revenue streams [108][118] Policy Impact - The company is expected to benefit from debt resolution policies, which will improve accounts receivable and open up expansion opportunities in lower-tier cities [11] - The company's investment intensity is higher than peers, with investment cash flow outflows accounting for 39.8% of revenue in 2023, positioning it well for future growth [133][134] Industry Outlook - The environmental protection industry is expected to benefit from debt resolution policies, with accounts receivable improvements and increased demand for waste and water treatment projects [128] - The company's focus on county-level waste incineration projects aligns with national policy goals, providing growth opportunities as local government payment capabilities improve [144][147]
天源环保：大订单支撑增长，谋求新业务机会