Investment Rating - The report gives a "Buy" rating to the company [5] Core Viewpoints - The company is expected to see marginal improvements in 2024, with a valuation inflection point approaching [4] - The company is a leader in waste-to-energy and a comprehensive platform with multiple business layouts [4] - The company is transitioning from a phase of new project additions to an operational cash flow generation phase [4] - The company's income, asset, and liability structures are continuously optimizing, with free cash flow expected to turn positive in 2024 [4] - The company is a high-value investment target in the absolute return track [5] Company Overview - The company is the largest waste-to-energy operator in China and globally, with a daily waste incineration capacity of 130,100 tons as of the end of 2023 [4] - The company focuses on three major areas: solid waste, water, and clean energy [4] - The company has a strong technological foundation, with 1,778 authorized patents as of the first half of 2023 [20] Business Segments Environmental Energy - The company has a daily waste incineration capacity of 130,100 tons, ranking first in the industry [4] - 51.7% of the capacity is located in third- and fourth-tier cities and county markets as of the end of 2023 [4] - The segment contributed 56.0% of the company's revenue and 67.1% of gross profit in the first half of 2023 [4] Environmental Water - The company's wastewater treatment volume and price have both increased, with a compound growth rate of 8.3% from 2017 to 2022 [4] - The average treatment price increased from 1.23 RMB/ton in 2017 to 1.71 RMB/ton in 2022 [4] Green Environmental Protection - As of the first half of 2023, the company has 51 biomass comprehensive utilization projects in operation [4] - The transformation to heating has provided a good supplement to cash flow [4] Financial Performance - The company's operating income exceeded construction income for the first time in 2022 [4] - The proportion of operating income increased to 56.9% in the first half of 2023 [4] - The company's free cash flow is expected to turn positive in 2024 [4] - The company's net profit attributable to the parent company is expected to be 4.037 billion, 4.053 billion, and 4.134 billion HKD in 2023, 2024, and 2025, respectively [5] Valuation and Dividends - The company's PE ratio is 4.73x, 4.71x, and 4.62x for 2023, 2024, and 2025, respectively [5] - The company's dividend yield is 7.72% as of March 21, 2024, higher than industry peers [5]
光大环境深度：聚焦高质量发展，垃圾焚烧旗舰企业将迎价值重估