XREC(SZ:000598) Xin Lang Cai Jing·2025-10-30 00:33Core Viewpoint - The company's core business shows steady growth, with performance meeting expectations. In the first three quarters of 2025, the company achieved operating revenue of 6.548 billion yuan, a year-on-year increase of 5.39%, and a net profit attributable to shareholders of 1.764 billion yuan, a year-on-year increase of 8.49% [1][2]. Revenue and Profit Growth - The company reported a non-recurring net profit of 1.735 billion yuan in the first three quarters, reflecting a year-on-year growth of 8.29%. In Q3 alone, the company achieved operating revenue of 2.356 billion yuan, up 6.85%, and a net profit of 789 million yuan, up 13.09% [2]. - The growth in performance is primarily driven by an increase in sewage treatment service fees and a rise in business volume, with the core water supply and sewage treatment business contributing steadily [2]. Major Projects and Future Growth - Several major construction projects are progressing smoothly, laying a solid foundation for future growth. The Chengdu central urban area kitchen waste harmless treatment project (Phase III) has entered the material testing phase, while the Wanjing Phase III waste incineration power generation project is gradually undergoing system debugging, with a waste processing capacity of 5,100 tons/day [3]. - The project is expected to be operational by 2026 and will help Chengdu achieve "zero landfill" for municipal waste, with pricing for treatment fees being a key factor for future profitability [3]. - Additional sewage treatment projects are expected to be operational in the next 1-2 years, which may further drive up sewage treatment service fees under the existing pricing mechanism [3]. Capital Expenditure and Cash Flow - The peak of capital expenditure is nearing its end, with cash flow improvement and dividend potential expected. The current investment cycle is approaching its conclusion, with capital expenditure projected to peak in 2025 and decline thereafter [3]. - In the first three quarters, cash payments for fixed asset purchases were 2.659 billion yuan, significantly reduced from 3.417 billion yuan in the same period last year [3]. - The company's operating cash flow remains strong, with a net amount of 2.399 billion yuan in the first three quarters, a year-on-year increase of 11.74%. With declining capital expenditure and stable cash flow from operations, the company is expected to achieve positive free cash flow by 2026, providing a solid foundation for increasing dividend ratios [4]. Profit Forecast - The company is projected to achieve operating revenues of 9.551 billion yuan, 10.277 billion yuan, and 11.068 billion yuan for 2025-2027, with year-on-year growth rates of 5.55%, 7.60%, and 7.70%, respectively. The net profit attributable to shareholders is expected to be 2.167 billion yuan, 2.327 billion yuan, and 2.556 billion yuan, with growth rates of 8.54%, 7.39%, and 9.85% [4].