Investment Rating - The report initiates coverage with a "Buy" rating for the company [3][8] Core Views - The company is expected to see a turning point in profits and cash flow, with potential for increased dividends [2][8] - The company’s core assets include an 18% stake in Conch Cement and waste incineration assets, with significant contributions to net profit from these segments [7][31] - The report highlights the company's strong operational metrics in waste incineration and a significant reduction in capital expenditures (Capex), leading to improved free cash flow [7][42] Financial Data and Profit Forecast - Revenue projections for the company show a decline from 8,015 million in 2023 to 6,128 million in 2025E, with a projected net profit of 2,093 million in 2025E [6][8] - The company anticipates free cash flow to improve significantly, reaching 15 billion in 2025, 21 billion in 2026, and 21 billion in 2027, contingent on government subsidies [8][42] - The report estimates a conservative valuation of 154 billion for the company, indicating a 22% upside from the current market capitalization [8] Waste Incineration Business - The company leads the industry in waste incineration capacity, with operational capacity of 48,100 tons/day and a utilization rate of 105% in 2024 [7][43] - The waste incineration segment is expected to generate stable cash flows, with a projected operating profit of 7.22 billion if government subsidies are accounted for [7][54] Conch Cement Assets - The company is projected to receive 500 million in cash dividends from its stake in Conch Cement, with a potential revaluation of these equity assets [7][66] - The report notes that Conch Cement's profitability is expected to stabilize due to industry self-discipline and declining energy costs [7][64] Dividend Potential - The company plans to double its dividend to 660 million in 2024, with a dividend payout ratio increasing from 13% to 33% [56] - The report emphasizes the market's underestimation of the company's dividend potential, driven by improved cash flow and reduced capital expenditures [10][11]
海螺创业（00586）：利润及现金流迎来拐点，分红提升可期