Group 1 - The core viewpoint of the article highlights that Dongwu Securities' research indicates that Green Power's acquisition of the Xinmi project has been approved, enhancing regional synergy and maintaining the logic of increasing dividends and ROE [1] - The acceleration of national subsidies recovery, along with a decrease in capital expenditures and financial costs, supports sustainable high dividends with potential for further increases [1] - The company is seen as a model for achieving higher dividends and ROE in the solid waste sector, with increasing free cash flow due to accelerated subsidy recovery and reduced capital expenditures [1] Group 2 - The company is actively expanding in heating and cost control, leading to improvements in both performance and ROE, while implementing equity incentives to ensure continued growth [1] - Profit forecasts for the company are maintained at 650 million, 718 million, and 760 million yuan for the years 2025-2027, corresponding to PE ratios of 10, 9, and 9 for Hong Kong stocks, and 15, 14, and 13 for A-shares [1] - The rating for the company remains "Buy" [1]

Investment Rating - The report maintains a rating of "Buy" for the environmental protection industry [1] Core Insights - The environmental protection industry, particularly in waste incineration, is poised for significant growth, especially in overseas markets such as Southeast Asia and Central Asia, driven by high processing fees and electricity prices [4][9] - The investment space for waste incineration in the ASEAN countries and India is estimated to be around 250 billion RMB, with a potential daily incineration capacity of approximately 496,900 tons [4][10] - Indonesian policies are evolving to optimize business models and enhance project profitability, with a focus on direct electricity sales rather than local government subsidies [22][24] Summary by Sections 1. New Growth in Waste Incineration and Overseas Market Potential - The ASEAN countries and India are projected to generate a daily waste output of 1.4615 million tons by 2024, creating a substantial investment opportunity in waste incineration [9][10] - The investment potential in waste incineration is estimated at 248.5 billion RMB, assuming a conservative investment of 500,000 RMB per ton [10][11] - Several domestic companies, including Kangheng Environment and China Tianying, are leading the expansion into Southeast Asia and Central Asia, with significant operational capacities established [14][15] 2. Indonesian Policy Driving Business Model Optimization - The Indonesian government has shifted from local to national control over waste management, enhancing the creditworthiness of payment entities and increasing electricity prices to 0.20 USD per kWh [22][24] - The new policy aims to construct 33 waste incineration plants nationwide, with a total investment of approximately 5.6 billion USD [24][25] - The rapid progress in project bidding and implementation reflects the government's commitment to developing the waste incineration sector [24] 3. Economic Viability of Indonesian Projects - Economic assessments indicate that Indonesian waste incineration projects can achieve significantly higher profitability compared to domestic projects, with projected net profits of 160 RMB per ton for new projects [26][30] - The sensitivity analysis shows that optimizing investment and operational costs can further enhance the return on equity (ROE) for these projects [27][30] - The comparison of domestic and overseas projects highlights that overseas projects benefit from higher processing fees and electricity prices, leading to increased revenue per ton [18][20]

Core Viewpoint - Green Power Environmental (01330) shares rose nearly 7% post-earnings report, currently up 5.15% at HKD 5.51, with a trading volume of HKD 34.66 million [1] Financial Performance - For the first three quarters, the company reported revenue of RMB 2.582 billion, a year-on-year increase of 1.5% [1] - Net profit attributable to shareholders reached RMB 626 million, reflecting a year-on-year growth of 24.4% [1] - In the third quarter alone, revenue was RMB 898 million, up 1.6% year-on-year [1] - Net profit for the third quarter was RMB 249 million, showing a year-on-year increase of 24.2% [1] Market Analysis - Dongwu Securities highlighted that Green Power Environmental exemplifies the solid waste sector's ability to increase dividends and return on equity (ROE) [1] - The current dividend yield for A-shares is 4.1%, while for Hong Kong shares it is 6.3% [1] - With the acceleration of national subsidies and a decrease in capital expenditures, the company's free cash flow is expected to strengthen, indicating potential for increased dividends [1] - The company is actively expanding in heating and cost control, leading to simultaneous growth in performance and ROE [1] - The implementation of equity incentives is expected to secure continuous growth [1]