Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of HKD 13.52 [1]. Core Insights - The company reported a stable growth in its core business, with a full-year revenue of RMB 6.548 billion, representing a year-on-year increase of 4.42%. The net profit attributable to the parent company was RMB 2.245 billion, up 11.22% year-on-year, although slightly below the expected RMB 2.484 billion due to reduced investment income [5]. - The company continues to optimize its financial structure and governance, with an increase in dividend levels expected as capital expenditures decrease. The proposed dividend for the year is HKD 0.40 per share [5][8]. Financial Performance - Revenue projections for the upcoming years are as follows: RMB 7.638 billion in 2026 (up 16.65%), RMB 8.826 billion in 2027 (up 15.55%), and RMB 10.417 billion in 2028 (up 18.04%) [4]. - The company's net profit is expected to reach RMB 2.497 billion in 2026 (up 11.18%), RMB 2.699 billion in 2027 (up 8.07%), and RMB 2.936 billion in 2028 (up 8.79%) [4]. Business Segments - The waste-to-energy business generated revenue of RMB 4.699 billion in 2025, a decrease of 3.7% year-on-year, primarily due to a 48.3% drop in construction revenue. However, operational revenue increased by 7.45% to RMB 4.195 billion, driven by higher electricity and steam sales [6]. - The new energy business saw a significant revenue increase of 277.36% to RMB 1.093 billion, with the production of cathode materials reaching approximately 42,000 tons, up 21.4% year-on-year [7]. Governance and Financial Optimization - The company reduced capital expenditures, with net cash from investment activities amounting to RMB 1.297 billion, a decrease of RMB 1.130 billion year-on-year. The debt-to-asset ratio improved to 39.64%, down 0.63 percentage points [8]. - The company plans to distribute a year-end dividend of HKD 0.30 per share, alongside an interim dividend of HKD 0.10, resulting in an overall dividend level increase of 3.8 percentage points to 28.4% [8]. Valuation and Forecast - The company’s valuation is based on a segmented approach, with the environmental business assigned a P/E ratio of 9.6x for 2026, reflecting a 10% discount compared to peers. The target price has been adjusted upward by 11.5% to HKD 13.52 [9].

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of HKD 10.39 [8][9]. Core Views - The company is expected to improve its operational income ratio, enhancing profit quality while reducing low-margin construction business and new investments [1][2]. - The company aims to continue reducing capital expenditures and increasing dividend payouts, indicating a positive outlook for shareholder returns [4][5]. Revenue and Profitability - In 2024, the company's revenue from waste disposal business is projected to be RMB 48.8 billion, a decrease of 20.8% year-on-year, with operational revenue increasing by 12.7% [2]. - The gross margin for waste disposal is expected to rise by 9.0 percentage points to 37.6% due to the decline in low-margin construction business [2]. - The company's attributable net profit for 2024 is forecasted at RMB 20.2 billion, down 18.0% year-on-year, which is below previous expectations [1][5]. Joint Venture Performance - The company's share of profits from joint ventures is expected to be RMB 13.2 billion in 2024, a decrease of 20.8% year-on-year, but with signs of recovery in the second half of 2024 due to price recovery in the cement industry [3]. Investment Activities - The company has significantly reduced its cash outflow for investment activities to RMB 24.3 billion in 2024, down 46.8% from 2023 [4]. - The proposed dividend for 2024 is HKD 0.3 per share, with a special dividend of HKD 0.1, resulting in a total payout ratio of 32%, up from 13% in 2023 [4]. Earnings Forecast and Valuation - The forecast for attributable net profit is adjusted to RMB 24.8 billion for 2025 and RMB 27.6 billion for 2026, reflecting a downward revision of 10% and 8% respectively [5]. - The target price is slightly adjusted downwards to HKD 10.39 based on a segment valuation method [5].