LK(600388) Minsheng Securities·2024-10-20 16:30Investment Rating - The report maintains a "Recommended" rating for the company, indicating a positive outlook for its future performance [3][5]. Core Insights - The company reported a revenue of 6.654 billion yuan for the first three quarters of 2024, a year-on-year decrease of 11.64%. However, the net profit attributable to shareholders increased by 0.91% to 647 million yuan, and the net profit excluding non-recurring items rose by 18.23% to 585 million yuan [3]. - The operating cash flow has significantly improved, with a net cash flow from operating activities of 1.164 billion yuan, a year-on-year increase of 101.17%. The company has a strong order backlog, with 19.213 billion yuan in hand for environmental engineering contracts and 1.284 billion yuan for energy storage system sales contracts [3]. - The acceleration of the integration of green electricity projects is notable, with several projects in various stages of development, including a 200MW wind-solar project and lithium mining projects in Serbia and Argentina [3]. - Continuous share buybacks by the controlling shareholder, Zijin Mining, reflect strong confidence in the company's long-term development [3]. Financial Summary - The company is projected to achieve revenues of 11.434 billion yuan, 13.449 billion yuan, and 15.575 billion yuan for 2024, 2025, and 2026, respectively, with corresponding net profits of 977 million yuan, 1.215 billion yuan, and 1.431 billion yuan [4][6]. - The earnings per share (EPS) are expected to increase from 0.90 yuan in 2024 to 1.32 yuan in 2026, with a price-to-earnings (PE) ratio decreasing from 15x to 10x over the same period [4][6]. - The company's gross margin is projected to remain stable around 24%, with a net profit margin increasing from 8.55% in 2024 to 9.19% in 2026 [6][7].