Investment Rating - The report maintains a "Buy" rating for the company [8] Core Views - The company reported a revenue of 6.028 billion RMB for 2024, a year-on-year increase of 19.2%, but the net profit attributable to shareholders was only 25.69 million RMB, a significant decline of 91.0% year-on-year, primarily due to goodwill impairment losses in hazardous waste business amounting to 238 million RMB [1][5] - Despite the challenges in the hazardous waste sector, the urban services business showed strong demand, with new project contracts exceeding 6.4 billion RMB in 2024, indicating potential for revenue recovery [1][2] Summary by Sections Financial Performance - In 2024, the urban services business generated 5.31 billion RMB in revenue, accounting for 88% of total revenue, with a year-on-year growth of 22.3% [2] - The hazardous waste treatment business reported revenue of 536 million RMB, with a gross margin of 5.0%, down 12.2 percentage points year-on-year due to decreased demand and average processing prices [4] Order Book and Growth Potential - As of the end of 2024, the company had a total backlog of urban service contracts amounting to 29.84 billion RMB, with new orders totaling 7.85 billion RMB in 2024 [3] - The acquisition of 85% of Hong Kong Chengmei Service Co., which has 35 urban service projects, is expected to enhance the company's market share and contribute to revenue growth [2] Earnings Forecast - The earnings forecast for the company has been revised downwards, with expected net profits of 240 million RMB, 250 million RMB, and 260 million RMB for 2025, 2026, and 2027 respectively [5] - The target price has been adjusted to 0.47 HKD based on a 6.5x PE ratio for 2025, reflecting the company's lower liquidity in the Hong Kong market [5][9]
北控城市资源（03718）：减值拖累净利，危废业务持续承压