Results for the first half of 2023: the company achieved revenue of HK $16.3 billion, down 24% from the same period last year. Among them, the income from construction services / operating services / financial revenue was HK $100 million in 41-95-27, compared with the same period last year. The ratio of construction services / operating services / financial income to total revenue was 25%, 59%, 16%, respectively. The decrease in revenue was mainly due to the decrease in the number of construction projects and the continued decline in the unit price of hazardous solid waste disposal. Net profit at home fell 1 per cent to HK $2.78 billion. Declare an interim dividend of HK14 cents per share.
Due to the lower-than-expected recovery of state subsidies, accounts receivable increased in the first half of the year, and cash flow is expected to become positive in the second half of the year as the recovery of state subsidies increases.
Strengthen market expansion, focus on main business: the company has steadily promoted market expansion. In the first half of the year, the company invested in 25 new projects and signed a supplementary agreement for existing projects, with a total investment of 3.12 billion yuan. related to garbage power generation and its collaborative business, municipal sewage and industrial wastewater treatment, comprehensive utilization of biomass, photovoltaic power generation and other fields. The new treatment scale of domestic waste and kitchen waste is 2000 tons / day and 775 tons / day respectively, the treatment scale of biomass raw materials is 50,000 tons / year, the water treatment scale is 180,000 square meters / day, and the installed capacity of photovoltaic power generation is 32.5MW. New breakthroughs have been achieved in the business model, and multiple environmental protection projects have been implemented in EPCO mode for the first time.
In terms of operation, the overall operation scale of the company has maintained continuous growth, with an annual disposal capacity of 25.63 million tons of domestic waste, 186000 tons of hazardous waste and 3.75 million tons of agricultural and forestry waste in the first half of the year. provide 13 billion kilowatt-hours of green electricity. The company's operating income has comprehensively exceeded the construction income. Due to the increase in the proportion of operating income and the adjustment of the revenue structure, the company's gross profit margin has increased from 35.6% to 44%. In the future, it will focus on the high-quality development of operating service income. The company adopts a diversified financing model, optimizes the financing structure, promotes the pressure of loan interest rates, issues low-interest medium-term bills, and replaces overseas high-interest loans to reduce financial costs.
Adjust the target price to HK $4.24 and maintain the buying rating: as the leading central enterprise in the environmental protection industry, the company focuses on the three main industries of solid waste, sewage and clean energy, and has the opportunity to grasp a new round of development driven by the goal of "double carbon". The company has gradually shifted from emphasizing asset investment to neglecting asset business development, capital expenditure is expected to reduce, cost reduction and efficiency measures continue to be effective, adjusting the company 2023x2024amp 2025 revenue forecast of HK $350,553bn, homing net profit of HK $100,000,000 in 43-46-49. The company is given a target price of HK $4.24, equivalent to 6 times 2023 earnings, corresponding to a 48 per cent increase in the current price, maintaining a buy rating.
Risk factors: change of subsidy policy, lower-than-expected project operation, cost fluctuation