Road Environment(688156) 长江证券·2024-10-30 01:43Investment Rating - The investment rating for the company is "Accumulate" [4]. Core Views - The company's revenue structure for the first three quarters of 2024 shows a significant increase in the sales of its baijiu residue bio-fermented feed products, with sales volume reaching 81,100 tons, a year-on-year increase of 22.98%, and sales revenue of 169 million yuan, up 20.92% [2][3]. - However, the environmental protection business has seen a notable decline, with total revenue for the first three quarters of 2024 at 222 million yuan, a decrease of 4.13% year-on-year, and a net profit loss of 3 million yuan, down 113.07% year-on-year [3]. - The company has disclosed a total planned production capacity of 700,000 tons per year for bio-fermented feed, with 170,000 tons already in operation and additional projects under construction that will enhance future growth potential [3]. - The company is expected to continue facing losses in 2024, with projected net profits of 27 million yuan and 55 million yuan for 2025 and 2026, respectively, leading to corresponding price-to-earnings ratios of 49x and 24x [3]. Summary by Sections Financial Performance - The company reported a total revenue of 222 million yuan for the first three quarters of 2024, with a significant drop in Q3 revenue to 77 million yuan, down 28.02% year-on-year [3]. - The overall gross margin for the first three quarters was 30.42%, a decrease of 4.19 percentage points year-on-year, primarily due to weak demand in the feed industry [5]. - The company experienced a credit impairment loss of 6.65 million yuan, compared to a gain of 0.3 million yuan in the same period last year, which negatively impacted performance [5]. Cost Structure - The company’s selling expenses increased significantly, with the selling expense ratio rising by 5.08 percentage points to 7.13%, attributed to expanded sales channels and increased marketing efforts [5]. - Management expenses also rose, with the management expense ratio (including R&D) increasing by 3.50 percentage points to 21.07%, due to the hiring of additional staff for new production facilities [5]. Future Outlook - The company is expected to continue its growth trajectory in the bio-fermented feed sector, with ongoing projects that will contribute to revenue growth in the coming years [3]. - The anticipated financial performance for 2024 shows a projected total revenue of 528 million yuan, with net profit expected to remain negative at -8 million yuan, but improving in subsequent years [8].