Grandblue Environment (SH:600323) Hua Yuan Zheng Quan·2025-05-14 11:23Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage in the market [6][9]. Core Views - The company is recognized as a leading player in environmental governance, with a balanced development strategy focusing on solid waste treatment as its core business, complemented by water and energy services [8][11]. - The acquisition of Yuefeng Environmental is expected to drive significant growth, enhancing the company's operational capacity and market position [11][32]. Summary by Sections Basic Data - The closing price of the company's stock is 24.01 CNY, with a total market capitalization of approximately 19,576.48 million CNY [4]. - The company has a total share capital of 815.35 million shares and a net asset value per share of 16.96 CNY [4]. Financial Forecast and Valuation - Projected revenues for 2023 to 2027 are 12,541 million CNY, 11,886 million CNY, 11,931 million CNY, 12,008 million CNY, and 12,222 million CNY, respectively, with a growth rate of -2.59%, -5.22%, 0.38%, 0.65%, and 1.78% [7][9]. - Expected net profits for the same period are 1,430 million CNY, 1,664 million CNY, 1,767 million CNY, 1,887 million CNY, and 2,040 million CNY, reflecting growth rates of 24.71%, 16.39%, 6.21%, 6.79%, and 8.08% [7][9]. - The company's price-to-earnings (P/E) ratios are projected to be 13.69, 11.77, 11.08, 10.37, and 9.60 for the years 2023 to 2027 [7]. Business Overview - The company has established a comprehensive operational model for solid waste management, with a focus on high operational efficiency and a capacity utilization rate of 119% [11][28]. - The solid waste segment generated a net profit of 10.25 billion CNY in 2024, with the majority coming from waste incineration [11][28]. - The acquisition of Yuefeng Environmental will increase the company's total waste incineration capacity to 88,000 tons per day, positioning it as the largest national waste incineration operator in A-shares [11][38]. Water and Gas Business - The company has a stable water supply business with a capacity of 1.7 million cubic meters per day, and it is expected to benefit from upcoming water price increases in the region [39][44]. - The gas business has shown recovery in profit margins, with a sales volume of 9.8 to 10.2 billion cubic meters from 2021 to 2024 [51]. Dividend Policy - The company has committed to increasing its dividends per share (DPS) by at least 10% annually from 2024 to 2026, reflecting its strong cash flow position [20][28].