HONGCHENG WATERWORKS(600461) GOLDEN SUN SECURITIES·2024-10-28 09:13Investment Rating - The report maintains a "Buy" rating for Hongcheng Environment (600461.SH) [3] Core Views - The company achieved a total revenue of 5.64 billion yuan in the first three quarters of 2024, a slight decrease of 1.2% year-on-year, while the net profit attributable to shareholders increased by 3.8% to 920 million yuan [1] - The company's gross margin improved to 33.9%, up 1.7 percentage points year-on-year, and the net profit margin reached 16.3%, an increase of 0.8 percentage points [1] - The company is focusing on enhancing its operational management and has shown improvements in cost control, with total expense ratio decreasing by 0.8 percentage points to 9.7% [1] - The company plans to distribute at least 50% of its net profit as dividends over the next three years, which is expected to enhance shareholder returns [1] Financial Performance Summary - Revenue for 2024 is projected to be 8.406 billion yuan, with a year-on-year growth rate of 4.4% [2] - Net profit for 2024 is estimated at 1.181 billion yuan, reflecting a year-on-year growth of 9.1% [2] - The earnings per share (EPS) for 2024 is expected to be 0.93 yuan, with a price-to-earnings (P/E) ratio of 10.3 times [2] - The company has maintained a high dividend payout ratio over the past three years, with a dividend yield of 4.4% [1] Business Highlights - The water supply business is focusing on comprehensive management and service enhancement, targeting potential customers within service areas [1] - The wastewater treatment segment is optimizing management standards and has secured a new project in LePing City with a total investment of 360 million yuan [1] - The clean energy sector is expanding its user base and focusing on distributed energy solutions [1] - The solid waste disposal business is advancing various waste management projects to ensure compliance and operational stability [1]