WANGNENG(SZ:002034) Guotai Junan Securities·2024-04-30 05:32Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 18.92 yuan, unchanged from the previous forecast [3][39]. Core Insights - The company experienced a stable operation in solid waste management in 2023, but the recycling business faced challenges. The lithium battery segment's inventory impairment and goodwill impairment provisions negatively impacted performance, with expectations for improvement in 2024 [5][39]. - The company reported a revenue of 3.178 billion yuan in 2023, a decrease of 5% year-on-year, and a net profit attributable to shareholders of 603 million yuan, down 17% year-on-year. The decline in revenue was primarily due to reduced income from lithium battery recycling and BOT project construction [33][39]. - The solid waste business showed steady growth, with a total of 21,220 tons of waste incineration capacity and a 4% year-on-year increase in waste disposal volume [5][15][34]. Summary by Sections Financial Performance - In 2023, the company achieved a revenue of 3.178 billion yuan, a 5% decline from the previous year. The net profit attributable to shareholders was 603 million yuan, down 17% year-on-year. The fourth quarter of 2023 saw a revenue of 777 million yuan, a 24% year-on-year decline, and a net profit of 86.59 million yuan, down 54% year-on-year [5][33]. - The company forecasts net profits of 739 million yuan, 809 million yuan, and 869 million yuan for 2024, 2025, and 2026, respectively, with corresponding EPS of 1.72 yuan, 1.88 yuan, and 2.02 yuan [39]. Business Segments - The solid waste management segment performed steadily, with a total of 923.69 million tons of waste processed in 2023, marking a 4% increase year-on-year. The company has also increased the processing capacity of its waste incineration projects [5][15][34]. - The recycling business faced significant challenges, with lithium battery recycling revenue dropping to 85.66 million yuan, a 65% decline year-on-year, and a gross margin of -16.28% due to inventory impairment and goodwill impairment provisions [5][17][37]. Market Position - The company is recognized as a leading player in the waste incineration power generation industry in China, focusing on environmentally friendly projects and expanding into various solid waste treatment areas [5][39].