XREC(SZ:000598) Soochow Securities·2024-10-26 02:38Investment Rating - The report maintains a "Buy" rating for Xingrong Environment [1] Core Views - The company achieved a revenue of 6.213 billion yuan in the first three quarters of 2024, representing a year-on-year increase of 9.17%. The net profit attributable to the parent company was 1.626 billion yuan, up 9.14% year-on-year [2] - The report highlights a steady growth in performance, with a slowdown in credit impairment losses in Q3 2024. The single-quarter revenue for Q3 2024 was 2.205 billion yuan, down 0.29% year-on-year but up 1.97% quarter-on-quarter. The net profit for Q3 2024 was 698 million yuan, an increase of 8.57% year-on-year and 48.14% quarter-on-quarter [2] - The company has improved its cash collection, with credit impairment losses in Q3 2024 amounting to 11 million yuan, a decrease of 37.08% year-on-year and 72.47% quarter-on-quarter [2] - The report emphasizes the company's strong cash flow position, with operating cash flow net amounting to 2.147 billion yuan, an increase of 18.50% year-on-year [2] Financial Forecasts and Valuation - The report forecasts the company's net profit attributable to the parent company for 2024-2026 to be 2.079 billion yuan, 2.280 billion yuan, and 2.489 billion yuan respectively, corresponding to a P/E ratio of 11, 10, and 9 times [2] - The company is expected to benefit from the expansion of its water and solid waste assets in Chengdu, with significant capacity increases and price hikes in wastewater treatment contributing to future revenue growth [2] - The report notes that the company has a dividend payout ratio of 27.53% in 2023, indicating potential for future increases in dividends [2]