Sanfeng Environment(601827) Soochow Securities·2024-11-01 16:30Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company has shown steady growth in revenue and free cash flow for the first three quarters of 2024, with total revenue of 4.518 billion yuan, a year-on-year decrease of 0.47%, and a net profit attributable to shareholders of 1.01 billion yuan, an increase of 2.58% year-on-year [1] - The decline in construction revenue has put pressure on Q3 2024 performance, but the optimization of revenue structure has improved profit margins [1] - The company has a strong cash flow position, with a significant increase in operating cash flow and a notable rise in free cash flow [1] Summary by Sections Financial Performance - For Q1-3 2024, the company achieved total revenue of 45.18 billion yuan, with a net profit of 10.1 billion yuan, and a non-recurring net profit of 9.98 billion yuan [1] - In Q3 2024, the company reported a revenue of 1.386 billion yuan, down 11.08% year-on-year, and a net profit of 344 million yuan, down 2.31% year-on-year [1] - The gross profit margin for Q3 2024 was 39.17%, an increase of 3.18 percentage points year-on-year [1] Cash Flow and Capital Expenditure - The net cash flow from operating activities for Q1-3 2024 was 1.575 billion yuan, an increase of 42.75% year-on-year [1] - Free cash flow for the same period was 1.139 billion yuan, a significant increase of 305.39% year-on-year [1] Technology and Market Position - The company has a leading position in waste incineration technology, with a strong cash flow advantage and operational efficiency [1] - In 2023, the company achieved a sales revenue of 957 million yuan from equipment sales, marking a year-on-year increase of 115.62% [1] Earnings Forecast and Valuation - The forecast for net profit attributable to shareholders has been adjusted downwards for 2024-2026, now projected at 1.222 billion yuan, 1.359 billion yuan, and 1.498 billion yuan respectively [1] - The corresponding P/E ratios are 12, 11, and 10 times for the respective years [1]