Gronway, July 10 | Bank of America published a research report stating that since this year, Everbright Environment (0257.HK) has moved from asset-heavy BOT projects to asset-light projects, and has successively obtained waste incinerator projects, EPCO contracts, and garbage sorting and sanitation projects. It is predicted that capital expenditure for the 2023-2024 fiscal year will drop from HK$12.4 billion to HK$7 billion and HK$5 billion. The bank also indicated that 80% to 90% of the company's waste incineration projects were included in the first batch of government eligible subsidies last year, with a total subsidy of RMB 2.1 billion. The management also revealed that all of its biomass energy projects have met the additional requirements of the authorities and may be included in the second batch, which is conducive to speeding up the receipt of subsidies. Considering the progress of garbage disposal fees levied by local governments, Bank of America conservatively estimates that the company's operating cash flow from 2023 to 2024 will reach HK$7.4 billion and HK$7.8 billion, while improved cash flow may lead to an increase in dividend rates. Based on the higher number of accounts receivable days, the bank lowered the target price from HK$5.6 to HK$4.6, reiterated its “buy” rating, and predicted that the payout level may increase after free cash flow in FY2025.