Summary of Longking Environmental Conference Call Company Overview - **Company**: Longking Environmental - **Industry**: Environmental Protection and Renewable Energy Key Points and Arguments Financial Performance and Projections - **2024 Performance**: Expected revenue of 830 million CNY, with projections of 1.1 billion CNY in 2025 and 1.4 billion CNY in 2026, reflecting a compound annual growth rate (CAGR) of 30% [2][6][22] - **Valuation**: Target valuation could reach 21 billion CNY by 2026 based on a 15x growth perspective [6] - **Q2 Growth**: Company reported a 12 percentage point growth in Q2, indicating a positive trend in financial performance [3][16] Green Energy Projects - **Key Projects**: - **Mami Cuo Photovoltaic Project**: Expected to contribute approximately 130 million CNY in net profit by 2026, with potential profits exceeding 180 million CNY if sold entirely to Zijin Mining [11] - **Democratic Republic of Congo Hydropower Project**: Anticipated to generate around 350 million CNY annually after its operation begins in 2029 [13] - **Overall Contribution**: Green energy projects are projected to add about 500 million CNY to the company's revenue, representing a 60% increase compared to the 2024 revenue [4] Market Position and Business Segments - **Market Share**: - Close to 20% market share in the power industry and approximately 50% in dust removal [5] - **Non-Electric Sector**: The company is leading technological advancements in the non-electric sector, with annual new orders around 10 billion CNY, 60% of which come from this sector [8] - **Waste Management**: The hazardous waste business is expected to improve marginally through a management operation model initiated on July 1 [9] Strategic Partnerships and Industry Trends - **Zijin Mining Collaboration**: The transition of Zijin Mining towards green mining increases the demand for Longking's high-quality green energy projects, enhancing profitability [7][15] - **Technological Advancements**: The company is setting ultra-low emission standards in the steel industry, aligning with power industry standards, which opens up new market opportunities [8] Future Outlook - **2025 Goals**: The company aims for a revenue target of 1.1 billion CNY, with significant contributions from air pollution control and waste incineration [18] - **Storage Business**: Expected to turn profitable in 2025, with projected earnings of 20-30 million CNY, marking a significant turnaround from previous losses [20] - **Long-term Growth**: The company is positioned for sustained growth with ongoing green energy projects, ensuring no issues with energy wastage [23] Risks and Challenges - **Debt and Goodwill**: The company maintains a low debt ratio of 15%, with minimal goodwill impairment risk, indicating a stable financial position [3][17] Additional Important Information - **New Projects**: Upcoming projects include wind and solar initiatives in Inner Mongolia and Heilongjiang, which are expected to further boost performance [14][19] - **Overall Market Conditions**: The company is well-positioned to capitalize on the increasing demand for clean energy and environmental solutions, making it a recommended investment target [23]

Summary of Longking Environmental Conference Call Company Overview - Longking Environmental maintains a leading position in the flue gas treatment industry with a desulfurization and denitrification market share of nearly 20% and a dust removal market share of 50% [2][6] - The company generates approximately 10 billion in new orders annually, primarily through the EPC model, serving industries such as power, steel, and cement [2][4] Key Points Market Position and Performance - Longking Environmental's order situation is robust, with a 13.6% year-on-year increase in new orders in Q1 2025, totaling over 19 billion [2][8] - The company has a strong competitive advantage in the flue gas treatment sector, evidenced by stable order growth and increasing market share [5][6] Financial Performance and Projections - The company expects to achieve a profit of approximately 11 billion in 2025, with contributions from various segments: 9.7 billion from environmental services, 2 billion from green electricity, and a small profit from energy storage [21] - For 2026, the projected profit is around 14 billion, driven by continued growth in green electricity projects and stable performance in core environmental services [22] Impact of Major Shareholder - Zijin Mining becoming the controlling shareholder has positively impacted Longking Environmental by providing financial support and enhancing order quality, leading to improved profit margins [2][7][8] Green Electricity Projects - The green electricity projects are progressing well, with several entering commercial operation, expected to contribute 2 billion in profit in 2025 [2][11] - Notable projects include the Tibet Lagocuo project, which is anticipated to yield stable profits due to its favorable operational conditions [13] Hazardous Waste Treatment Challenges - The hazardous waste treatment segment faced operational losses in 2024, but improvements are expected in the second half of 2025 through operational collaborations to enhance capacity utilization [9][10] Energy Storage Business - The energy storage segment is projected to turn profitable in 2025 after a loss of approximately 70 million in 2024, aided by partnerships and operational improvements [14] Financial Management and Risk Control - Longking Environmental emphasizes cash flow management, maintaining positive operating cash flow and manageable debt levels [3][17] - The company has implemented long-term equity incentives and a dividend policy to attract institutional investors [18] Market Valuation - The company is expected to reach a market value of 21 billion by 2026, based on a projected compound growth rate of around 30% and a price-to-earnings ratio of 15 [23] Additional Insights - The company’s strategic partnerships, such as with Yiwai for battery cell sales, are expected to enhance operational efficiency and profitability [14] - The collaboration with Jitai Intelligent, focusing on wall-climbing robots for equipment maintenance, is seen as a thematic growth opportunity, albeit with limited immediate financial impact [16]

Core Viewpoint - The forum highlighted the urgent need for green transformation in the context of global climate challenges, emphasizing the role of international cooperation, particularly among Global South countries, to drive positive demand and investment in green projects. Group 1: Green Transformation Challenges - The demand for green transformation is facing significant challenges, including a decline in demand and even negative demand in some areas [2] - The global climate crisis is becoming increasingly severe, making it difficult to achieve the Paris Agreement's goal of limiting temperature rise to within 2°C [2] - There is a risk of supply-demand mismatch during the green transition, necessitating strong government intervention and stimulus measures [2][3] Group 2: Role of Global South and China - Cooperation among Global South countries is crucial for reshaping the new world economic order and sustaining green transformation [3] - China is expected to play a significant role in leading positive demand and cooperation among developing countries [2][3] Group 3: Investment Opportunities in Green Projects - There is a substantial demand for investment in green electricity and clean energy projects, which can yield attractive returns [3] - If green electricity projects can ensure a compound annual return of 3%, international capital is likely to flow into these investments [3] Group 4: ESG Participation and Benefits - Over 1,000 Chinese listed companies have disclosed their carbon footprints, indicating a significant increase in participation in ESG principles [4] - Companies that adopt ESG practices can benefit from lower loan rates and shorter investment payback periods, enhancing their competitive edge [4] Group 5: Innovative Financial Paths - Exploring innovative financial pathways based on natural resources, such as a metal trading platform in Shanghai, aims to make the "green value" of resources visible in market pricing [5]