Solid growth in operating data, reiterating the "buy" rating

On October 21, Green Power released major operating data for the third quarter of 2023. In the first three quarters, the company completed 9.99 million tons of garbage, + 18% year-on-year, 2.85 billion kilowatt-hours of online electricity, + 11% year-on-year, and the main operating data increased steadily. Maintaining the profit forecast, we expect the 23-25 return net profit to be RMB 8.05pm 9.11pm 10.03 billion. For Green Dynamics H shares (1330 HK), we give 7.6x 2023 forecast PE, corresponding to a target price of HK $4.79 (previous value: HK $5.05), reiterating the "buy" rating.

For Green Power A shares (601330 CH), we give 15.3 times the 2023 forecast PE, corresponding to the target price of RMB8.87 (previous value: RMB9.34), reiterating the "buy" rating.

The amount of garbage entering the factory and the amount of electricity connected to the Internet continue to grow.

According to the company's preliminary statistics, in the third quarter of 2023, the total garbage inflow of the company's subsidiaries was 3.69 million tons, an increase of 26 percent over the same period last year, an increase of 16 percent over the same period last year, an increase of 16 percent over the same period last year, and an increase of 1.01 billion kilowatt-hours on the Internet, an increase of 16 percent over the same period last year. Steam supply is 105700 tons. From January to September 2023, the cumulative garbage intake of subsidiaries was 9.99 million tons, an increase of 18% over the same period last year, the cumulative power generation was 3.46 billion kWh, an increase of 11% over the same period last year, the cumulative online electricity was 2.85 billion kWh, an increase of 11% over the same period last year, and the cumulative steam supply was 300800 tons, an increase of 43.65%. The steady growth of the company's waste into the factory and the amount of electricity connected to the Internet, while actively expanding the business of kitchen waste and heating, is expected to further promote income diversification and promote high-quality growth.

The operating capacity of municipal solid waste incineration reaches 39500 tons per day.

According to the company's announcement on September 20, five projects are under construction in the first half of the year, three of which were put into production in the first half of the year, and the Zhangqiu Phase II project was put into production at the end of August. The project currently under construction is the Jingxi project in Guangxi. As of June 30, the company's waste incineration power generation project operating capacity of 38,000 tons / day, by the end of August, the company's waste incineration power generation operating capacity has reached 39500 tons / day.

Actively promote investment mergers and acquisitions and business development

In terms of investment and mergers and acquisitions, Lanzhou Fengquan Environmental Protection and other projects continue to advance, the company signed the "Equity acquisition Framework Agreement" in February, basically completed the on-site survey in the first half of the year, signed a supplementary agreement in August, and the exclusive clause was postponed to the end of the year. In terms of new business development, the company actively planned and expanded the low-carbon environmental protection industrial park project, and signed the "Jinan Zhangqiu low-carbon Environmental Protection Industrial Park Project Investment Cooperation Framework Agreement" with the people's Government of Zhangqiu District of Jinan in May. Preliminary work such as project feasibility research has been carried out.

Risk hints: the amount of garbage disposal and online electricity are lower than expected, the gross profit margin of solid waste disposal is lower than expected, and the decline in construction revenue is more than expected.