Investment Rating - The report assigns a "Buy" rating for the company, expecting the stock price to outperform the market by more than 10% within the next 12 months [8][9]. Core Insights - The company plans to acquire 63% of Hunan Renhe Environment for approximately 2.197 billion yuan, with the transaction approved by the Shenzhen Stock Exchange. This acquisition is expected to enhance the company's profitability and solidify its position in the solid waste management industry [11][26]. - Hunan Renhe Environment has committed to achieving net profits of no less than 416 million, 436 million, 458 million, and 475 million yuan from 2024 to 2027, indicating a reasonable acquisition valuation with a projected PE of 8.38x for 2024 [26][41]. - The company is expected to benefit from a significant increase in free cash flow, with a projected 2023 operating cash flow growth of 9.9% to 869 million yuan and a free cash flow of 709 million yuan, highlighting its strong dividend potential [26][41]. Summary by Sections Acquisition Details - The company intends to issue shares and pay cash to acquire 63% of Hunan Renhe Environment for 2.197 billion yuan, with 1.2 billion shares issued to raise 1.87 billion yuan and additional funds not exceeding 768 million yuan for cash payments and working capital [11][26]. - The acquisition is expected to create a strong synergy in solid waste management, particularly in the areas of waste transfer and kitchen waste processing in Changsha [51][49]. Financial Projections - The company forecasts revenues of 2.378 billion yuan in 2024, with a growth rate of 28%, and net profits of 552 million yuan, reflecting a 7.3% increase [60]. - The projected EPS for 2024 is 1.35 yuan per share, with a PE ratio of 12.01, indicating a solid financial outlook [60]. Market Position and Strategy - The company is positioned to leverage its acquisition to enhance its operational capabilities in solid waste management, particularly in the growing market of Changsha, where waste generation is expected to rise due to population growth [19][51]. - The report emphasizes the company's strong cash flow and dividend yield, with a projected dividend payout of 3.69 billion yuan in 2023, representing a 5.6% yield based on current market capitalization [26][41].
军信股份：收购仁和环境方案审核通过，期待固废全产业链布局