Science Environmental Protection (SH:688480) Guohai Securities·2024-10-31 13:31Investment Rating - The investment rating for the company is "Buy" (maintained) [1][7][10] Core Insights - The company achieved a non-GAAP net profit growth of 78% year-on-year in the first three quarters of 2024, indicating a clear growth trajectory [1][5] - The company reported a total revenue of 585 million yuan, a year-on-year increase of 46%, and a net profit attributable to shareholders of 143 million yuan, up 164% year-on-year [5] - The company is expected to benefit from increased environmental capital expenditures from its parent company, Zijin Mining, with projected revenues of 1.192 billion yuan in 2024, representing a growth rate of 47% [7][8] Summary by Sections Financial Performance - In Q3 2024, the company achieved a revenue of 229 million yuan, a year-on-year increase of 74%, and a net profit of 27.9 million yuan, up 56% year-on-year [5] - The gross margin for the first three quarters of 2024 was 35.32%, an increase of 2.71 percentage points year-on-year [5] - The company’s operating cash flow showed a net outflow of 16.69 million yuan [5] Growth Drivers - The company’s growth is driven by external acquisitions, particularly the acquisition of Fujian Zijin Reagent Co., which contributed significantly to revenue and profit [4][5] - The revenue from comprehensive solutions grew by 88.03% in 2023, with a shift towards operational service income expected to enhance revenue stability [4] - Ongoing R&D efforts have led to successful trials in copper recovery, opening new revenue streams [4] Future Projections - Revenue projections for 2024-2026 are 1.192 billion yuan, 1.545 billion yuan, and 1.776 billion yuan, respectively, with net profits expected to reach 212 million yuan, 228 million yuan, and 290 million yuan [7][8] - The company is expected to maintain a competitive edge with a projected PE ratio of 14 for 2024, decreasing to 11 by 2026 [7][8]