LK(600388) Changjiang Securities·2025-01-26 10:14Investment Rating - The investment rating for the company is "Buy" and is maintained [7]. Core Views - The company is expected to achieve a net profit attributable to shareholders of 800-850 million yuan in 2024, representing a year-on-year increase of 57.18%-67.00%. The fourth quarter is projected to yield a net profit of 153-203 million yuan, compared to a loss of 133 million yuan in the same period last year [4][10]. - The anticipated lower net profit in 2024 compared to 2023 is primarily due to the non-continuous timing of environmental engineering order settlements, stable overall order scale, and losses in hazardous waste and energy storage businesses, although there are expectations for profitability recovery in the future [4][10]. - The company is focusing on improving the gross profit margin of its environmental business and effectively reducing period expenses, indicating a positive long-term development outlook [4][10]. Summary by Sections Financial Performance - The company forecasts a net profit of 800-850 million yuan for 2024, with a non-recurring net profit of 690-740 million yuan, reflecting a significant year-on-year increase of 98.67%-113.07% [4][10]. - The total revenue for 2023 was 10.973 billion yuan, with an expected increase to 11.882 billion yuan in 2024 [13]. Business Development - The company has signed contracts for over 2 GW of green electricity projects and is currently constructing more than 1 GW of projects, with several projects already operational [10]. - The establishment of a subsidiary for mining machinery manufacturing is aimed at enhancing business capabilities, with a recent electric mining vehicle project launched [10]. Strategic Initiatives - The company has announced a stock option incentive plan, increased dividend distribution, and an employee stock ownership plan to enhance performance certainty [10]. - The company aims for a revenue growth of 10% annually over the next three years and a return on equity (ROE) of no less than 10% [10]. Profit Forecast and Valuation - The company is expected to achieve net profits of 827 million yuan, 1.310 billion yuan, and 1.613 billion yuan for 2024, 2025, and 2026, respectively, with corresponding year-on-year growth rates of 62.4%, 58.4%, and 23.2% [10]. - The projected price-to-earnings (PE) ratios for 2024, 2025, and 2026 are 18.8x, 11.8x, and 9.6x, respectively [10].