Changjiang Securities·2025-11-24 13:44Investment Rating - The report maintains a "Positive" investment rating for the industry [13]. Core Insights - The Indonesian waste incineration market is set to begin construction in Q1 2026, with potential revenue recognition in the same year. The market is expected to generate annual operational revenue of approximately 29.4 to 36.5 billion yuan [2][58]. - The high calorific value of Indonesian waste, influenced by its composition, is projected to yield higher profitability and cash flow compared to domestic projects. The average electricity generation per ton of waste is estimated at 539 kWh, with revenue per ton of waste ranging from 612 to 758 yuan [2][9][51]. Summary by Sections Market Demand - Indonesia faces a pressing waste management crisis, with over 60% of waste improperly disposed of. In 2023, the country generated 56.63 million tons of waste, with only 39.01% managed properly, leading to significant environmental and public health concerns [6][18]. - The economic conditions in Indonesia, including a GDP per capita of approximately 4,925 USD in 2024, urbanization rate of 59.2%, and a population growth CAGR of 0.8% over the past five years, support the feasibility of widespread waste incineration [6][33]. Government Initiatives - The Indonesian presidential decree (2025 No. 109) was issued to streamline the waste incineration project process, with the first projects expected to start construction in Q1 2026. The decree outlines responsibilities for various stakeholders, including the sovereign investment fund and local governments [7][30][34]. Project Quality - The calorific value of Indonesian waste is significantly higher than that of domestic waste, with typical urban waste calorific values of 8.6 MJ/kg compared to 5.34 MJ/kg in China. This difference is attributed to the composition of waste, including a lower proportion of moisture-rich food waste and a higher proportion of combustible materials [8][38]. - The average electricity generation per ton of waste is estimated to be between 482 and 597 kWh, which is higher than the average in China [9][47]. Financial Projections - The revenue structure for Indonesian waste incineration projects will primarily consist of electricity sales, with a fixed price of 0.2 USD per kWh. This contrasts with domestic projects, which often include waste disposal fees that can delay cash flow [10][55]. - The projected annual operational revenue for the Indonesian waste incineration market could reach between 29.4 billion and 36.5 billion yuan, assuming an 85% penetration rate of waste incineration [51][58]. Investment Recommendations - The report recommends leading companies with established positions in the Indonesian market, such as Weiming Environmental, China Everbright International, and others, to capitalize on the emerging opportunities [11][58].