Tongyuan Environment(688679)2024-12-09 00:35Investment Rating - The report gives a "Buy" rating for the company, indicating a positive outlook for its stock performance in the coming months [4][6][116]. Core Viewpoints - The company specializes in comprehensive ecological environment remediation, with a strong focus on solid waste pollution control and water environment management. It has shown a steady increase in revenue, with a compound annual growth rate (CAGR) of 20.4% from 2020 to 2023 [2][4]. - The company's profitability has been impacted by slow government funding disbursements, but improvements in debt resolution policies are expected to enhance financial performance [2][4]. - The company is actively expanding its market presence, particularly in solid waste management and water treatment, with significant new orders expected in 2024 [3][4][57]. Summary by Sections 1. Company Overview - The company was established in 1999 and listed on the Shanghai Stock Exchange's Sci-Tech Innovation Board in December 2020. It has developed expertise in solid waste pollution control, wastewater treatment, and soil and groundwater remediation [2][23]. - The company holds multiple engineering qualifications, including first-class qualifications in municipal public works and environmental engineering [23]. 2. Business Growth Potential - The solid waste management market is expected to grow steadily, with the company actively seeking orders outside its home province. In 2022, the market size for landfill management in China was approximately 7.948 billion yuan, with a year-on-year growth of 4.9% [3][57]. - The company has a strong order backlog in water environment management, with new orders amounting to approximately 480 million yuan in 2024, supporting future revenue growth [3][75]. 3. Financial Improvement and New Business Ventures - The company has seen a gradual increase in accounts receivable, which reached 990 million yuan in 2023, accounting for 35.7% of total assets. The ongoing debt resolution policies are expected to improve the company's financial situation [4][93]. - The company is entering the renewable energy sector through its subsidiary, with a focus on photovoltaic projects, having secured contracts worth over 300 million yuan in 2023 [4][99]. - A stock incentive plan was introduced in early 2024 to align employee interests with company performance, promoting further growth [4][104]. 4. Profit Forecast - The company is projected to achieve revenues of 1.58 billion yuan, 1.75 billion yuan, and 1.94 billion yuan for the years 2024, 2025, and 2026, respectively, with corresponding net profits of 20 million yuan, 60 million yuan, and 80 million yuan [4][112].