海螺创业迎现金流拐点，固废板块提分红+供热IDC拓展提ROE

Investment Rating - The report maintains an "Increase" rating for the environmental protection industry [1] Core Viewpoints - The environmental protection industry is experiencing a cash flow turning point, particularly in the waste disposal sector, which is expected to increase dividends and improve return on equity (ROE) through heat supply and IDC expansion [1][11] - The report highlights the importance of decreasing capital expenditures leading to improved free cash flow and dividend potential, as the industry matures [11][12] - The report emphasizes the growth potential in waste incineration and the water service sector, driven by policy reforms and operational efficiencies [15][17] Summary by Sections Industry Trends - The environmental protection sector is seeing a significant increase in the sales of new energy sanitation vehicles, with a 73% year-on-year growth in the first four months of 2025, and a penetration rate of 14.55% [25] - The report notes that the average profit margin for waste disposal operations is 47.38%, with a return on equity (ROE) of 7.92%, indicating strong operational efficiency [9] Key Recommendations - The report recommends several companies for investment, including Conch Venture, Huaneng Environment, Green Power, and Yongxing Shares, among others, due to their strong cash flow and dividend potential [5][10] - It suggests focusing on companies with high dividend potential, such as Junxin Shares and Green Power, which are expected to see significant increases in cash dividends in 2024 [12][13] Financial Projections - The projected net profit for the parent company from 2025 to 2027 is expected to be 21.82 billion, 23.04 billion, and 24.38 billion yuan, respectively, with corresponding price-to-earnings ratios of 7.1, 6.7, and 6.3 [10] - The report anticipates that the dividend payout ratio for the sector could reach between 97% and 120% under stable conditions, with potential for even higher payouts in the coming years [12][13] Sector Analysis - The waste incineration sector is expected to benefit from reduced capital expenditures and improved cash flow, leading to higher dividends [11] - The water service sector is projected to experience stable growth and high dividends, supported by recent water price reforms in major cities [15][17]