Jinwu Financial News | According to Guotai Junan Development Research Report, Everbright Environment (00257) is the flagship enterprise of the Everbright Group and the only state-owned enterprise among listed companies in the waste incineration industry. By the end of 2023, the company had a waste incineration production capacity of 158,900 tons/day, making it the world's largest waste incineration operator. In 2022, the company's waste incineration production capacity has been put into operation, accounting for 13% of the industry's market share, and is in an absolute leading position.
The bank maintained the company's projected net profit for 2024-2026 at HK$44.67, 45.41 and HK$4.620 billion, respectively, with corresponding EPS of HK$0.73, 0.74 and HK$0.75, respectively. The bank reiterated that the company's free cash flow inflection point will occur in 2024, dividends may be expected to rise to a higher level, and industry leaders are expected to usher in a revaluation. The company was given a target price of HK$5.11, maintaining the “Overweight” rating.
The bank mentioned that the bank estimates that under the normal operating conditions of the company, the net cash flow from operating activities is conservatively estimated to exceed HK$7 billion. The 2024 capital expenditure plan is clearly reduced. Without considering the accelerated recovery of state subsidies, 2024 will also see a positive change in the company's free cash flow. Improved cash flow will support more steady cash dividends. Major factors that have long suppressed company valuations have been eliminated.