Group 1 - Minghe Investment recently conducted research on a listed company, Xingrong Environment, focusing on its new projects and ongoing construction progress [1] - Xingrong Environment has introduced several projects, including the Chengdu Xiwayan Reclaimed Water Plant and Chengdu Sludge Phase III Project, which are already operational [1] - The company is planning to launch the Chengdu Wanxing Environmental Power Plant (Phase III) project in 2026, with a gradual decrease in future capital expenditures and an emphasis on increasing dividend payouts [1] Group 2 - Minghe Investment, established in April 2010 with a registered capital of 10 million RMB, adheres to a "stable, long-term, and win-win" investment philosophy [2] - The company focuses on professional and standardized investment management services, supported by a robust research system and experienced management team [2] - Minghe Investment employs a partner management model, where core employees hold company shares and options, continuously improving incentive mechanisms [2]

Core Insights - The company expects a 16% year-on-year increase in net profit for 2024, with over 2.4 billion in receivables collected, leading to a 32% increase in net cash flow from operating activities [1] Financial Performance - The company maintains an "overweight" rating, slightly adjusting net profit forecasts for 2025-2026 to 1.735 billion (previously 1.795 billion) and 1.806 billion (previously 1.920 billion), while introducing a forecast of 1.882 billion for 2027, corresponding to EPS of 2.13, 2.21, and 2.31 respectively [2] - In 2024, the company achieved operating revenue of 11.886 billion, a decrease of 5% year-on-year, while net profit attributable to shareholders was 1.664 billion, an increase of 16% year-on-year [2] - The net cash flow from operating activities reached 3.273 billion, a 32% increase year-on-year, with the company actively collecting receivables [3] Business Segments - The solid waste management business generated revenue of 6.008 billion, a 7% decrease year-on-year, but net profit increased by 4% to 1.025 billion, with an operating net profit of 1.004 billion, up 10% [3] - The gas business revenue decreased by 7% to 3.758 billion, influenced by a decline in sales price and slight decrease in sales volume, although the gross margin improved [3] - The company is actively expanding its heating business, with a 34% year-on-year increase in heating volume to 1.48 million tons, having signed 17 external heating agreements [3] Strategic Initiatives - The acquisition of Yuefeng Environmental is progressing, with expectations to complete the acquisition by mid-2025 after meeting all preliminary conditions [4] - The acquisition is anticipated to lead to a significant increase in incineration capacity and gradual realization of synergies [4]