Sealand Securities released a research report, stating that in the first half of 2024, Eb Environment(00257) achieved revenue of 15.612 billion Hong Kong dollars, a decrease of 4% year-on-year; Achieved net income attributable to shareholders of 2.454 billion Hong Kong dollars, a decrease of 12% year-on-year; The board of directors announced a mid-term dividend of 14 Hong Kong cents per share for the six months ending June 30, 2024, which is the same as the same period last year; The payout ratio is 35%, an increase of 4 percentage points year-on-year.
The bank pointed out that in the first half of 2024, the company's domestic waste treatment volume reached 28 million tons, an increase of 9% year-on-year; The agricultural and forestry waste treatment volume was about 3.9 million tons, an increase of 4% year-on-year; The power generation capacity was about 13.6 billion kilowatt-hours, an increase of 5% year-on-year, and the heating and steam supply volume increased by over 60% year-on-year; The treatment volume of sewage and waste incineration project leachate was about 0.84 billion cubic meters, basically the same as the same period last year; The export contract value of environmental protection equipment increased by 9% compared with the first half of 2023.
The bank further pointed out that the company's gross margin in the first half of 2024 was 38.73%, a decrease of 5.41 percentage points year-on-year.The company's green environmental protection sector settled government subsidy arrears of 1.534 billion yuan in March, the largest amount of government subsidy arrears recovered in recent years; The accounts receivable recovery amount of environmental protection energy and water affairs increased by about 11% and 21% year-on-year.
The bank believes that the company's cash flow has improved significantly, the government subsidy repayment exceeded expectations, and the dividend payout ratio is high, with a high investment value; It is expected that the company's revenue for 2024-2026 will be 31.868/31.965/30.616 billion Hong Kong dollars, and the net income attributable to shareholders will be 4.202/4.372/4.385 billion Hong Kong dollars, corresponding to PE ratios of 5.16/4.96/4.95 times, and maintains a 'buy' rating.