BGE(603588) 国泰君安·2024-10-25 12:14Investment Rating - The report maintains a "Buy" rating for the company with a target price of 9.11 RMB, unchanged from the previous rating [2][5] Core Views - The company's performance is temporarily under pressure due to reduced engineering profits and raw material price fluctuations, but improvement is expected in Q4 [1][5] - Revenue growth is driven by increased sales from Jiangxi Xinke and Jingyuan High Energy, while net profit decline is attributed to reduced engineering income, increased financial expenses, and lower material sector profits [5] - The resource recycling sector, including Xinke and Pengfu, is operating normally despite being affected by metal price fluctuations [5] Financial Performance - Q3 2024 revenue reached 3.905 billion RMB, up 29% YoY, but net profit attributable to shareholders fell 11% YoY to 145 million RMB [5] - Gross margin for Q3 2024 was 13.33%, down 0.54 percentage points QoQ, while net profit margin was 4.77%, down 0.92 percentage points QoQ [5] - Operating cash flow improved significantly, with net operating cash flow of 219 million RMB for the first three quarters of 2024, compared to -1.198 billion RMB in the same period last year [5] Business Operations - Jiangxi Xinke achieved full production capacity in the first half of 2024, completing its front-end and back-end integrated industrial chain layout [5] - Chongqing Yaohui completed technical upgrades in February 2024, expanding its range of usable raw materials [5] - Jinchang High Energy started production in April 2024 and is expected to achieve multi-metal recovery in the second half of the year [5] Financial Forecasts - The report maintains forecasts for 2024-2026 net profits at 908 million, 997 million, and 1.084 billion RMB respectively, with corresponding EPS of 0.59, 0.65, and 0.71 RMB [5] - Revenue is expected to grow from 13.723 billion RMB in 2024E to 17.495 billion RMB in 2026E, with a CAGR of 12.2% [9] - ROE is projected to increase from 9.1% in 2024E to 9.5% in 2026E [9] Valuation Metrics - Current P/E ratio is 8.66x for 2024E, with a forward P/E of 7.88x for 2025E and 7.25x for 2026E [9] - The company trades at a P/B ratio of 0.8x, below the industry median of 1.43x [4][11] - EV/EBITDA is expected to decline from 8.94x in 2024E to 7.57x in 2026E [10]