Investment Rating - The report maintains an "Increase" rating for the environmental protection industry [1] Core Viewpoints - The report emphasizes a strategy of "steady growth + price reform + increased dividends = comprehensive allocation," highlighting the importance of focusing on import substitution and the value enhancement of renewable resources [9][10] - The central government has clarified the top-level design for price reform, which is expected to lead to a revaluation of the water and solid waste sectors [16][17] - The collaboration between waste incineration and IDC (Internet Data Center) projects is seen as a key opportunity for achieving ultra-low PUE (Power Usage Effectiveness) and zero-carbon initiatives [18][19] Summary by Relevant Sections Industry Trends - The environmental protection sector is expected to benefit from a focus on domestic demand-driven defensive assets, including solid waste, water, electricity, and gas [9] - The report notes a 52% year-on-year increase in sales of new energy sanitation vehicles, with penetration rates rising to 13.57% [31] Solid Waste Management - The solid waste sector is entering a stable operational phase, with free cash flow improving and dividend logic being realized [10] - Key recommendations include companies like Huanlan Environment, Yongxing Co., and Green Power [10][16] Water Management - The water sector is characterized by rigid demand and pricing, with ongoing reforms expected to enhance profitability and lead to a revaluation of water companies [10][16] - Recommended companies include Xingrong Environment and Hongcheng Environment [10][16] Energy Sector - The electricity sector is noted for its strong cash flow performance, with recommendations for companies like Changjiang Power and Huadian International [11][12] Renewable Resources - The report highlights the strategic value of renewable resources, particularly in the context of rising import costs for soybeans and corn, which may enhance the competitiveness of alternative feedstocks like distiller's grains [14] - Companies such as Lude Environment are recommended for their focus on resource recycling [14] Lithium Battery Recycling - The report indicates a slight improvement in profitability for lithium battery recycling projects, with ongoing fluctuations in metal prices [46][47] Collaboration Opportunities - The report discusses the potential for collaboration between waste incineration facilities and data centers, emphasizing the economic and environmental benefits of such partnerships [20][23]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company reported a total revenue of 14.5 billion yuan in 2024, representing a year-on-year increase of 37.04%. However, the net profit attributable to shareholders decreased by 4.52% to 481.82 million yuan [7][8] - The growth in revenue is primarily driven by the resource utilization segment, which saw a significant increase in revenue from hazardous waste recycling [7] - The company is focusing on strategic adjustments in its environmental engineering business, shifting its client base from government to large enterprises and expanding its service model [7] Financial Performance Summary - Total revenue for 2024 is projected at 145 billion yuan, with a year-on-year growth of 37.04% [7] - Gross profit for 2024 is expected to be 2.092 billion yuan, reflecting an 8.5% increase year-on-year, with a gross margin of 14.4%, down 3.8 percentage points [7] - The resource utilization segment generated 11.137 billion yuan in revenue, a 72.2% increase year-on-year, with a gross profit of 1.018 billion yuan, up 89.8% [7] - The environmental operation services segment reported revenue of 1.729 billion yuan, a 6.3% increase, with a gross margin of 49.9% [7] - The environmental engineering segment experienced a decline in revenue to 1.633 billion yuan, down 34.3%, with a significant drop in gross profit [7] Cash Flow and Valuation - The company reported a net cash flow from operating activities of 760 million yuan in 2024, a significant improvement from -950 million yuan in the previous year [7] - The report projects a decrease in net profit forecasts for 2025 and 2026, adjusting from 930 million yuan and 1.1 billion yuan to 630 million yuan and 750 million yuan respectively [7] - The projected P/E ratios for 2025 to 2027 are 15, 13, and 11 times respectively [7]