HONGCHENG WATERWORKS(SH:600461) Soochow Securities·2024-10-28 00:30Investment Rating - The report maintains a "Buy" rating for Hongcheng Environment (600461) [1] Core Views - In the first three quarters of 2024, the company achieved operating revenue of 5.643 billion yuan, a year-on-year decrease of 1.22%, while net profit attributable to shareholders increased by 3.82% to 922 million yuan. The non-recurring net profit attributable to shareholders grew by 12.23% to 905 million yuan [1] - In Q3 2024, the non-recurring net profit attributable to shareholders increased by 16% year-on-year, with a gross profit margin of 37.89%, up 4.88 percentage points year-on-year. The decline in revenue was mainly due to a decrease in income from the engineering and gas sectors, while the company continued to reduce costs and improve efficiency [1] - The company has committed to maintaining a dividend payout ratio of no less than 50% from 2024 to 2026, with a projected dividend yield of 4.8% for 2024 [1] Financial Performance Summary - For 2024, the company forecasts total revenue of 8.534 billion yuan, with a year-on-year growth of 6.03%, and net profit attributable to shareholders of 1.163 billion yuan, representing a growth of 7.37% [1] - The company's financial expenses decreased by 25% in the first three quarters of 2024, and the asset-liability ratio improved to 58.53%, down 4.38 percentage points year-on-year [1] - The operating cash flow for the first three quarters of 2024 was 1.376 billion yuan, a decrease of 2.77% year-on-year, with a cash collection ratio of 90.94% [1][8] Valuation Metrics - The report projects earnings per share (EPS) of 0.91 yuan for 2024, with a price-to-earnings (P/E) ratio of 10.49 based on the current price [1] - The company’s return on equity (ROE) is expected to be 10.82% for the first three quarters of 2024, down 1.22 percentage points year-on-year [1]