Investment Rating - The report assigns an "Outperform" rating to the company, with a target price range of 7.23 to 7.60 CNY per share, indicating a potential upside of 26.6% to 33.1% from the current price of 5.71 CNY [5][3]. Core Views - The company is a leading private enterprise in the biomass power generation sector, focusing on the utilization of agricultural and forestry biomass resources. It has successfully transitioned from manufacturing to becoming a benchmark in low-carbon and environmentally friendly industries [1][12]. - The biomass power generation industry is currently facing operational pressures due to subsidy arrears and rising raw material costs. However, the company has achieved growth through refined management practices [1][2]. - The partnership with the Zhongke system is expected to enhance the company's digital and intelligent transformation, while the decline in coal prices is anticipated to improve raw material procurement costs, leading to a recovery in profitability [2][3]. Summary by Sections Company Overview - Founded in 1993, the company initially started with gas appliance manufacturing and later entered the waste incineration and biomass power generation sectors. It became a publicly listed company focused on biomass resource utilization after divesting its manufacturing business in 2021 [1][12]. Financial Performance - The company’s revenue is projected to reach 4.076 billion CNY in 2025, with a compound annual growth rate (CAGR) of 9.32% since its listing. The net profit attributable to shareholders is expected to grow to 280 million CNY in 2025, reflecting a year-on-year increase of 29.2% [4][22]. - The company’s operating income from power supply is expected to account for 53.8% of total revenue in 2024, while heating income will contribute 43.6% [15]. Industry Analysis - As of the end of 2024, the total installed capacity of biomass power generation in China reached 45.99 million kilowatts, with the company ranking third in the agricultural and forestry biomass sector with an installed capacity of 491 MW [1][44]. - The biomass power generation industry is characterized by its stable output and ability to adjust, making it suitable for base load and peak shaving functions in the power system. It aligns with national strategies for pollution control and rural revitalization [37][42]. Competitive Advantages - The company has established a competitive edge through effective risk management and operational efficiency. It has successfully integrated its manufacturing management experience into its environmental projects [2][62]. - The company has successfully included 13 projects in the national subsidy list, which is crucial for its financial performance, given the industry's reliance on government subsidies [2][61].