Grandblue Environment (600323) 信达证券·2025-03-12 08:02Investment Rating - The report assigns a "Buy" rating to the company [2][6]. Core Insights - The company, Hanlan Environment (600323.SH), is a leading player in the waste incineration industry, backed by the Nanhai District State-owned Assets Supervision and Administration Commission. It has a stable profit model and a complete industrial chain [5]. - The company has shown a significant increase in net profit, with a 18.82% year-on-year growth in Q3 2024, reaching 1.385 billion yuan [5]. - The company has turned positive in free cash flow in 2023, with a 66.7% increase in dividends per share for 2024, reflecting confidence in shareholder returns [5]. - The acquisition of Yuefeng Environmental is expected to enhance both the quantity and quality of operations, positioning Hanlan Environment as the largest waste treatment company in the A-share market [5]. - The company's valuation has decreased from around 15x to about 10x, despite a 43.7% increase in net profit from 2021 to 2024, indicating potential for valuation recovery [5]. Summary by Sections 1. Company Overview - Hanlan Environment has expanded its business through acquisitions since its establishment, evolving from a water supply company to a comprehensive environmental service provider [13]. - The company has a strong shareholder background, with significant support from the Nanhai State-owned Assets Supervision and Administration Commission [15]. 2. Financial Performance - The company reported total revenue of 12.875 billion yuan in 2022, with a projected revenue of 13.277 billion yuan in 2024, reflecting a compound annual growth rate of 19.5% from 2019 to 2023 [7]. - The net profit attributable to the parent company is expected to grow from 1.142 billion yuan in 2022 to 1.708 billion yuan in 2024, with a compound annual growth rate of 11.9% [7]. 3. Business Segments - The waste incineration business is the core of the company's operations, with a current operational capacity of approximately 31,000 tons per day, expected to increase significantly post-acquisition of Yuefeng Environmental [39]. - The water and energy segments are also contributing stable cash flows, with the water supply prices in Foshan having not been adjusted for nine years, indicating potential for future increases [5]. 4. Acquisition of Yuefeng Environmental - The planned acquisition of Yuefeng Environmental for up to 11.3 billion HKD will increase Hanlan's operational capacity to 74,300 tons per day, making it the largest in the A-share market [5]. - The acquisition is expected to enhance profits by approximately 418 million yuan in 2025 and 433 million yuan in 2026 [5]. 5. Dividend Policy - The company has committed to a minimum annual dividend growth of 10% from 2024 to 2026, with a proposed cash dividend of 0.8 yuan per share for 2024, reflecting a 66.7% increase [5][34].