Investment Rating - The industry investment rating is "Positive" and maintained [11] Core Insights - The hazardous waste disposal and utilization industry is experiencing structural overcapacity, with average load rates below 40% across various provinces, and some categories even below 15% [27][29] - In 2023, the total industrial hazardous waste generated in China reached 105.465 million tons, with a disposal utilization volume of 105.029 million tons, indicating a significant production and disposal gap [6][17] - The government is actively guiding the industry by categorizing projects into encouraged, cautious, and discouraged investment types, focusing on addressing overcapacity and promoting technological upgrades [8][35] Summary by Sections Hazardous Waste Supply and Demand - In 2023, the top five provinces for hazardous waste generation were Shandong, Jiangsu, Inner Mongolia, Hebei, and Guangdong, accounting for 37% of the national total [6][17] - As of May 2023, the total issued hazardous waste qualifications reached 200 million tons/year, with a year-on-year growth of 9.5% [6][17] - The resource utilization capacity is 131 million tons/year, making up 65.2% of the total qualifications [6][17] Structural Overcapacity in Hazardous Waste Disposal - The average load rate for hazardous waste disposal facilities is generally below 40%, with some provinces like Jiangxi showing a load rate of only 31% [27][29] - Shandong, the largest hazardous waste-producing province, has a utilization load rate of 22.3% [27][29] - The low load rates are attributed to rapid qualification expansion, mismatched types and regions of qualifications, and the mixing of non-hazardous waste in processing [28][29] Policy Guidance - The government encourages investment in areas with capacity gaps, such as the disposal of medical waste and certain hazardous materials, while being cautious about overcapacity in incineration and landfill projects [8][35] - Specific projects are categorized for investment encouragement, caution, or discouragement based on their potential for overcapacity and technological innovation [35][36] Investment Recommendations - Focus on leading companies in metal resource recovery, as they possess strong business development capabilities and are strategically located near raw material sources [9][38] - Companies like Zhejiang Fu Holdings and High Energy Environment are highlighted for their potential growth in the hazardous waste resource recovery sector [9][38]

Investment Rating - The investment rating for the company is "Accumulate" and is maintained [9]. Core Views - The company's revenue showed steady growth, with a total revenue of 20.91 billion yuan in 2024, representing a year-on-year increase of 10.35%. However, the net profit attributable to the parent company decreased by 5.28% to 971 million yuan, and the net profit after deducting non-recurring gains and losses also fell by 7.09% to 751 million yuan [2][6]. - In Q1 2025, the company achieved a revenue of 4.94 billion yuan, a year-on-year increase of 10.86%, but the net profit attributable to the parent company decreased by 12.88% to 271 million yuan. The net profit after deducting non-recurring gains and losses, however, increased by 46.2% to 116 million yuan, indicating significant volatility in performance due to non-recurring items [2][6]. - The company has completed a share buyback plan, repurchasing shares worth 173 million yuan, which will be used for employee stock ownership plans or equity incentives to enhance employee motivation [6]. Summary by Sections Financial Performance - In 2024, the company achieved a total revenue of 20.91 billion yuan, with a net profit of 971 million yuan, down 5.28% year-on-year. The net profit after deducting non-recurring items was 751 million yuan, down 7.09% [2][6]. - The fourth quarter of 2024 saw a revenue of 5.65 billion yuan, a year-on-year increase of 20.63%, with a net profit of 196 million yuan, up 401.23% [6]. - For Q1 2025, the company reported a revenue of 4.94 billion yuan, a 10.86% increase year-on-year, while the net profit decreased by 12.88% to 271 million yuan [6]. Business Segments - The hazardous waste resource recovery business generated 19.79 billion yuan in revenue, a year-on-year increase of 9.92%, accounting for 94.62% of total revenue. The clean energy equipment revenue increased by 20.35% to 1.055 billion yuan [6]. - The gross profit margin for 2024 was 12.04%, a decrease of 0.98 percentage points, primarily due to a decline in the gross margin of hazardous waste disposal and resource recovery products [6]. Cash Flow and Financial Health - The company maintained a high cash collection ratio of 106.11%, with a net cash flow from operating activities of 1.54 billion yuan, a year-on-year increase of 20.35%. The free cash flow was 714 million yuan [6]. - The asset-liability ratio stood at 53.42%, an increase of 3.61 percentage points year-on-year [6]. Future Outlook - The company is expected to focus on hazardous waste disposal and resource recovery, with projected net profits for 2025, 2026, and 2027 estimated at 1.06 billion yuan, 1.13 billion yuan, and 1.18 billion yuan, respectively, corresponding to PE ratios of 15.2x, 14.3x, and 13.7x [6].