DUN'AN ENVIRONMENTAL(002011) Tianfeng Securities·2024-10-28 08:09Investment Rating - The investment rating for the company is "Buy" with a target price indicating a potential return of over 20% within the next six months [5][13]. Core Views - The company reported a revenue of 9.34 billion yuan for the first three quarters of 2024, reflecting a year-on-year increase of 10.54%, while the net profit attributable to the parent company was 650 million yuan, up 20.10% year-on-year [1]. - The third quarter of 2024 saw a revenue of 2.99 billion yuan, a year-on-year increase of 4.09%, but the net profit attributable to the parent company decreased by 17.18% to 170 million yuan [1][3]. - The company is expected to benefit from a policy encouraging the replacement of old equipment, which may accelerate growth in the valve segment [2]. Financial Performance Summary - The company’s gross profit margin for Q3 2024 was 18.6%, down 0.8 percentage points year-on-year, attributed to structural pressures in the high-margin equipment business [3]. - The company’s net profit margin improved to approximately 7.9% when excluding credit impairment losses, which were over 60 million yuan for the quarter [3]. - Revenue growth rates are projected at 12.74% for 2024, 13.41% for 2025, and 12.68% for 2026, with net profit attributable to the parent company expected to reach 930.89 million yuan in 2024, 1.17 billion yuan in 2025, and 1.38 billion yuan in 2026 [4][9]. Valuation Metrics - The company’s price-to-earnings (P/E) ratios are projected to be 12.67x for 2024, 10.11x for 2025, and 8.56x for 2026 [4][9]. - The price-to-book (P/B) ratios are expected to decline from 2.21 in 2024 to 1.50 by 2026 [4][9]. - The company’s enterprise value to EBITDA (EV/EBITDA) is projected to decrease from 7.57 in 2024 to 3.99 by 2026, indicating improving valuation metrics over time [4][9].