| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 25.03 | 488 |
| Intrinsic value (DCF) | 2.01 | -53 |
| Graham-Dodd Method | 0.74 | -83 |
| Graham Formula | 0.25 | -94 |
China Resources and Environment Co., Ltd. (600217.SS) is a leading Chinese waste management company specializing in the recycling and dismantling of waste electrical and electronic products (WEEE). Founded in 1996 and headquartered in Beijing, the company operates in China's rapidly growing environmental protection sector, focusing on the circular economy. Their core business involves recycling major household appliances including televisions, washing machines, refrigerators, air conditioners, and microcomputers. The company serves downstream industries such as modified plastics manufacturing, glass processing, recycled metal smelting, and hazardous waste disposal, positioning itself as a critical link in China's waste-to-resource value chain. As China intensifies its environmental regulations and promotes sustainable development, China Resources and Environment plays a vital role in the country's industrial waste management ecosystem, contributing to resource conservation and pollution reduction while capitalizing on the growing demand for responsible e-waste disposal solutions.
China Resources and Environment presents a specialized play in China's environmental sector with modest financial performance. The company's 7.28 billion CNY market cap reflects its niche positioning in the WEEE recycling market. While revenue of 4.02 billion CNY demonstrates operational scale, the thin net income margin of 0.56% (22.47 million CNY) and diluted EPS of 0.0152 CNY indicate challenging profitability in the competitive recycling industry. Positive operating cash flow of 348.85 million CNY and a dividend yield of approximately 0.4% provide some investor appeal, but high total debt of 1.69 billion CNY relative to cash reserves of 884.92 million CNY raises leverage concerns. The company's beta of 0.866 suggests moderate volatility compared to the broader market. Investment attractiveness hinges on China's regulatory push for environmental protection and circular economy initiatives, though margin pressures and competitive intensity warrant careful monitoring.
China Resources and Environment operates in a highly fragmented but strategically important segment of China's waste management industry. The company's competitive advantage stems from its specialized focus on WEEE recycling, which requires specific technical expertise, regulatory compliance, and established collection networks. Their positioning as one of the licensed formal recyclers in China's regulated e-waste management system provides a regulatory moat against informal operators. However, the company faces intense competition from both state-owned enterprises and private sector players in the environmental services space. The thin profit margins (0.56% net income margin) suggest either pricing pressure or operational inefficiencies that undermine competitive positioning. The company's scale in processing major household appliances provides some economies of scale, but the capital-intensive nature of recycling operations (evidenced by 159 million CNY in capital expenditures) creates barriers to profitability. Their downstream customer relationships with modified plastics, glass processing, and metal smelting companies represent a strategic asset, though dependence on these industrial sectors creates cyclical exposure. The company's Beijing headquarters location provides proximity to regulatory bodies and policy makers, potentially offering advantages in navigating China's evolving environmental regulations.