Group 1 - The controlling shareholder of Sanfeng Environment, Chongqing Derun Environment Co., Ltd., has received a loan commitment from CITIC Bank Chongqing Branch to support the acquisition of additional shares, with a loan amount not exceeding 50 million yuan [1] - As of July 7, 2023, Derun Environment has cumulatively increased its stake in Sanfeng Environment by 12.65 million shares, accounting for approximately 0.76% of the company's total share capital [1] - In 2023, Chongqing Water Environment Holding Group, the indirect controlling shareholder of Sanfeng Environment, also increased its stake by 7.13 million shares, representing about 0.42% of the total share capital [2] Group 2 - Sanfeng Environment has maintained stable operating performance, achieving a revenue of 5.991 billion yuan in 2024, a year-on-year decrease of 0.59%, but a 0.30% increase when excluding one-time factors [3] - The net profit attributable to shareholders for 2024 was 1.168 billion yuan, reflecting a year-on-year growth of 0.2% [3] - The company has signed contracts for 9 incinerator and complete equipment supply projects in international markets, with a total contract value exceeding 800 million yuan [3] Group 3 - By the end of 2024, Sanfeng Environment has invested in 57 waste incineration power generation projects, with a designed waste processing capacity of 61,450 tons per day [2] - The company has achieved market application results in 260 projects and 419 incineration lines across multiple countries and regions, with a total designed processing capacity exceeding 230,000 tons per day [2] - In the first quarter of 2025, Sanfeng Environment reported a revenue of 1.555 billion yuan, a year-on-year increase of 0.16% [4]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company's operating performance shows steady growth, with overseas equipment orders continuing to break through [1] - The company achieved a revenue of 5,991 million yuan in 2024, a year-on-year decrease of 0.59%, while the net profit attributable to the parent company was 1,168 million yuan, a slight increase of 0.20% [7] - The report highlights that the company's solid waste operations are growing steadily, and operational efficiency remains leading in the industry [7] Financial Performance Summary - Revenue and Profit Forecast: - Total revenue for 2023 is 6,027 million yuan, with a forecast of 5,991 million yuan for 2024, and expected growth to 6,577 million yuan in 2025 [1] - Net profit attributable to the parent company is projected to be 1,168 million yuan in 2024, increasing to 1,264 million yuan in 2025 [1] - Profitability Metrics: - The gross profit margin for 2024 is 33.18%, an increase of 1.42 percentage points year-on-year [7] - The net profit margin for 2024 is 20.42%, up by 0.24 percentage points [7] - Cash Flow and Dividends: - The company reported a free cash flow of 14,910 million yuan in 2024, a significant increase of 160.65% [7] - The dividend payout ratio for 2024 is 35.07%, an increase of 1.28 percentage points [7] Operational Highlights - Solid Waste Operations: - The company’s solid waste operation revenue reached 38,400 million yuan in 2024, with a growth of 5.29% [7] - The total waste processing volume for fully owned and controlled projects was 15.08 million tons, an increase of 7.42% [7] - Equipment Sales: - Engineering construction revenue decreased to 19,180 million yuan in 2024, down by 13.93% [7] - The company signed contracts for overseas equipment sales totaling over 800 million yuan [7] Future Outlook - The report indicates that the company's solid waste operations and accelerated overseas equipment sales are expected to enhance cash flow value, which is currently underestimated [7] - The forecast for net profit attributable to the parent company is adjusted to 12,640 million yuan for 2025 and 13,500 million yuan for 2026, with a new estimate of 14,230 million yuan for 2027 [7]

Core Viewpoint - The company reported stable growth in its main business, maintaining industry-leading operational efficiency in waste-to-energy generation despite a slight decline in overall revenue [2][3]. Financial Performance - In 2024, the company achieved operating revenue of 5.991 billion yuan, a year-on-year decrease of 0.59%. However, after excluding one-time factors from 2023 and 2024, the revenue showed a same-caliber growth of 0.30% [2]. - The net profit attributable to shareholders reached 1.168 billion yuan, reflecting a year-on-year increase of 0.20%, with a same-caliber growth of 7.08% [2]. - The company's net profit after deducting non-recurring items was 1.155 billion yuan, marking a year-on-year growth of 1.54% [2]. Operational Highlights - As of the end of 2024, the company operated 54 waste incineration projects, with 44 being wholly-owned or controlled, and a total processing capacity of 42,500 tons per day [2]. - The company processed 15.08 million tons of waste in its controlled projects, a year-on-year increase of 7.42% [2]. - The electricity generated from waste reached 5.24 billion kWh, up 8.53% year-on-year, with power generation per ton of waste at 428.8 kWh, maintaining an industry-leading position [2]. - Steam sales amounted to 936,400 tons, reflecting an 18.46% increase year-on-year [2]. Business Development - The company has extended its focus on waste incineration, with a total of 57 projects in domestic investment, achieving a design waste processing scale of 61,450 tons per day [3]. - In January 2025, the company won a bid for a small-scale waste incineration project in Youyang County, adding 200 tons per day of waste processing capacity [3]. - The company signed 10 new steam sales contracts in 2024, expected to add approximately 630,000 tons of steam supply annually [3]. - Investments in energy storage and distributed photovoltaic projects totaled over 350 million yuan, with ongoing projects showing gradual benefits [3]. International Expansion - In 2024, the company signed nine contracts for the supply of incinerators and complete equipment, with a processing capacity of 6,370 tons per day, including contracts in India, Thailand, and Vietnam, totaling over 800 million yuan [4]. - The company secured 35 new orders for wastewater and drinking water equipment, including five overseas projects, with a contract value of 239 million yuan [4]. Profit Forecast - The company is projected to achieve operating revenues of 6.294 billion yuan, 6.676 billion yuan, and 7.125 billion yuan for 2025-2027, representing year-on-year growth rates of 5.06%, 6.08%, and 6.72% respectively [4]. - The net profit attributable to shareholders is expected to be 1.337 billion yuan, 1.470 billion yuan, and 1.619 billion yuan for the same period, with growth rates of 14.48%, 9.91%, and 10.15% respectively [4]. - Based on the closing price on March 28, 2025, the corresponding PE ratios are projected to be 10.70, 9.74, and 8.84, with EPS of 0.80, 0.88, and 0.97 yuan respectively, leading to a "recommended" rating for the company [4].