Zhijun Finance learned that Guangdong Fenghua Environment (01381), a leading domestic waste incineration power generation enterprise and urban comprehensive environmental and sanitation service provider, released its 2023 performance report on the evening of March 26. In 2023, Guangdong Fenghua Environment actively responded to external complicated environmental changes, continuously improved production efficiency and technical level, and achieved quality improvement and efficiency enhancement, highlighting the toughness of its operation.

Cash flow turned positive, gross profit increased, and operational quality and efficiency significantly improved.

Guangdong Fenghua Environment's annual revenue was HKD 4.98 billion. Due to the fact that most of the waste incineration power generation projects have been put into operation, construction income decreased by 76.7%, the revenue declined. Excluding the construction income factor, the Group's operating revenue increased by 1.6% year-on-year; due to the increase in overseas interest rates and the impact of exchange rate factors, the Group's net profit decreased by 24.9% year-on-year to HKD 1.021 billion during the year; The operating gross profit margin of the Group increased from 30.7% to 41.8% after a significant decrease in construction income with a low gross profit margin, and the quality of profit improved significantly.

It is worth noting that the financial situation of Guangdong Fenghua Environment has become more stable in the year, thanks to the commissioning of waste incineration power generation projects. The Group's operating cash flow reached HKD 1.079 billion, achieving the first positive cash flow since 2014, cash flow improved significantly. As the core business shifts from the construction period to the operation period, the blood-making ability of the core business will be strengthened. The Group's operating cash flow is expected to continue its good performance, ensuring the sustainable development of Guangdong Fenghua Environment in the long run.

The core business has an excellent location layout and operational efficiency is better than the industry average.

Waste incineration and power generation are effective ways to reduce carbon emissions. Driven by policies, the industry has experienced a period of rapid development for ten years and entered a mature stage. In 2023, the domestic production and living order is still in the stage of recovery, and Guangdong Fenghua Environment achieved sales of electricity and waste disposal income of HKD 3.43 billion, basically flat year-on-year, demonstrating production and operational resilience.

At present, Guangdong Fenghua Environment has a total of 36 signed waste incineration power generation projects, with a total daily processing capacity of 54,540 tons of urban domestic waste; 33 projects under its subsidiary have been put into operation, with a daily processing capacity of 43,690 tons of urban domestic waste, making it the largest private waste incineration power generation enterprise in China.

At the same time, the Group has an excellent project location layout. In Guangdong Province, where there is a huge demand for urban domestic waste incineration and treatment, the Group has deployed 17 projects with a total production capacity of 26,790 tons per day, accounting for 49% of total production capacity. The business has now covered 12 provinces including Guangdong, Shanghai, Sichuan, Shandong, and Jiangsu, and other provinces.

With the advantage of location and refined operation, the operating parameters of the Group's waste incineration power generation business are significantly ahead of its peers, with an overall capacity utilization rate of over 100% and a factory power consumption rate of less than 14%, lower than the industry average of 15%-20%. In terms of waste treatment costs, the average value of the Group's projects is 85 yuan/ton, and the average value of Guangdong Province's projects is about 100 yuan/ton, which is 10% higher than the industry average, and the overall operational efficiency remains at a high level.

Throughout the year, the Group processed 16.6157 million tons of harmless waste, a year-on-year increase of 18.7%; incineration power generation reached 6.218 billion kWh, a year-on-year increase of 18.4%, equivalent to saving 1.623 million tons of standard coal, reducing carbon dioxide emissions by 8.621 million tons, and effectively helping the country respond to climate change and achieve the "dual carbon" goal. In addition, Guangdong Fenghua Environment's Liaohe waste incineration power generation project has obtained registration approval for the carbon reduction standard, and is expected to reduce 245,000 tons of carbon dioxide equivalent emissions annually. This is an important step for the Group's carbon asset development.

The Hong Kong market has made breakthroughs, and the second growth curve is accelerating.

In recent years, Guangdong Fenghua Environment has actively created a second growth curve. While deepening the waste incineration and power generation business, it has also expanded innovative "incineration+" business strategies and used the end advantages of urban domestic waste incineration to actively promote the extension of the industry chain, expand the layout of integrated environmental sanitation and other lightweight asset businesses with growth potential.

2023年、粤丰環保は香港市場に成功して、広東香港マカオ大湾岸圏に重要な一歩を踏み出しました。7月、グループは最初の香港地区契約を獲得しました。この契約の価値は28.18億香港ドルで、グループが主導する『粤丰-保华同盟』が最初に信頼を得た香港北大屿山廃棄物転送施設と離島廃棄物転送施設第2期(10年間)の継続契約を獲得しました。

粤丰環保は今年3月にこのプロジェクトを正式に引き継ぎ、既存の施設を改装し、効率を高め、信頼性の高い、先進的で革新的な廃棄物管理サービスを提供することに注力しています。このプロジェクトを通じて、グループは香港市場を開くことを期待し、環境保護産業チェーンの開発に新しい篇章を切り開くことができます。

2023年、粤丰環保の環境衛生事業は50%以上成長し、2023年から累計で80億元以上の契約金額を獲得しました。その中で、河北省曲陽県プロジェクトはグループの環境衛生事業で初めて30億元を超えるプロジェクトであり、市場はグループのビジネス力を認めました。

将来を見据えて、'焼却+'の成長戦略を推進し続けることで、粤丰環保は中核事業であるごみ焼却発電の安定的な発展を維持しながら、上下流の事業を積極的に展開し、廃棄物一体化サービスなどを全方位的に強化し、各事業の協調効果を強化し、今後の業績成長に力強い力を注入し続ける予定です。