生活垃圾处置营收同比+9%，锂电回收营收同比-56%前三季度公司生活垃圾处置实现营收18.74 亿元，同比+8.57%；餐厨垃圾处置实现营收3.28 亿元，同比+10.42%；BOT 项目建造实现营收0.65 亿元，同比-62.12%；锂电池再利用实现营收0.48 亿元，同比-56.29%；再生橡胶实现营收0.83 亿元，同比+15.35%。前三季度公司完成垃圾入库量674.90 万吨，上网电量19.20 亿度。固废处置收入占比达到91%，有望贡献持续、稳定的利润和现金流入。Wangneng Environmental released its three-quarter report: Q3 achieved revenue of 0.839 billion yuan (yoy -2.51%, qoq +4.42%) and net profit to mother of 0.15 billion yuan (yoy -9.14%, qoq -17.45%), lower than our expectations (expected 0.174-0.19 billion yuan), mainly due to a decline in lithium battery recycling revenue and gross margin. In 2024, Q1-Q3 achieved revenue of 2.429 billion yuan (yoy +1.19%), net profit to mother of 0.512 billion yuan (yoy -0.67%), after deducting non-net profit of 0.523 billion yuan (yoy +3.06%). The company's waste incineration projects have all been put into operation or trial operation. Cash flow is expected to continue to increase, and breakthroughs have been achieved in overseas travel. Maintain a “buy” rating.
Operating cash flow +36% YoY
The net cash flow from the company's operating activities in the first three quarters was 1.115 billion yuan, +36.14% year over year, capital expenditure was 0.597 billion yuan, -20.28% year over year; accounts receivable were +9.13% to 1.217 billion yuan, and the balance ratio was 53.68%, -1.59 pct year over year. In 2023, the company achieved free cash flow of 0.256 billion yuan, which was corrected for the first time in history, and 9M24 reached 0.518 billion yuan. Under the debt conversion policy and user payment trend, the company's cash flow is expected to grow further in the future, creating a solid foundation for increasing dividends and returns to shareholders.
Domestic waste disposal revenue +9% YoY, lithium battery recycling revenue -56% YoY; in the first three quarters, the company achieved revenue of 1.874 billion yuan, +8.57%; food waste disposal achieved revenue of 0.328 billion yuan, +10.42% YoY; BOT project construction achieved revenue of 0.065 billion yuan, -62.12%; lithium battery reuse achieved revenue 0.048 billion yuan, -56.29% YoY; recycled rubber achieved revenue 0.083 billion yuan YoY billion yuan, +15.35% year over year. In the first three quarters, the company completed 6.749 million tons of garbage storage and 1.92 billion kilowatts of feed-in electricity. Solid waste disposal accounts for 91% of revenue, which is expected to contribute to continuous and stable profits and cash inflows.
Thailand signed a turnkey contract with a total amount of approximately RMB 0.394 billion. On September 26, the company signed 4 contracts with Siam Power Nongsarai and Siam Power Naklang to provide equipment design, installation, and commissioning services for two domestic waste incineration power plants, Nongsarai 9.9 MW and Naklang 9.9 MW in Korat Province, Thailand. The total contract amount is approximately RMB 0.394 billion. This agreement is the first batch of turnkey project contracts signed by Wangneng overseas, and significant progress has been made in the global layout.
The profit forecast was lowered, and the target price was 18.42 yuan
Considering rising domestic waste disposal costs, increased competition for lithium battery recycling, and lowering the gross margin forecast for domestic waste treatment and lithium battery recycling, we expect net profit to be 0.633/0.724/0.774 billion yuan in 2024-2026 (previous value: 0.711/0.798/0.865 billion yuan). Comparatively, the company's 2025 Wind unanimously anticipated an average PE value of 10.9 times, giving the company 10.9 times PE in 2025, corresponding to a target price of 18.42 yuan (previous value: 18.09 yuan).
Risk warning: Repayments fell short of expectations, competition in the lithium battery recycling market intensified, and customer expansion in the rubber recycling business fell short of expectations.
