Jovo Energy(SH:605090) HTSC·2025-10-28 05:42Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 37.40 [1] Core Insights - The company reported a revenue of RMB 5.18 billion in Q3, showing a year-over-year decline of 10.4% but a quarter-over-quarter increase of 4.8%. The net profit attributable to the parent company was RMB 380 million, down 11.3% year-over-year but up 7.2% quarter-over-quarter. The lower net profit was attributed to typhoon impacts and maintenance costs affecting pre-tax profits by approximately RMB 97 million [4][5] - The LNG business demonstrated resilience despite a relaxed market supply and price pressure, with gross margins improving year-over-year and quarter-over-quarter. The company expects to benefit from long-term contracts and rising LNG prices due to anticipated cold weather [5] - The LPG business faced significant short-term disruptions but is expected to recover quickly in Q4, with operational improvements in the dynamic dual-storage system between Dongguan and Guangzhou [6] - The specialty gas business is focusing on commercial aerospace needs, becoming a core supplier for Hainan commercial launches, which is expected to contribute to profit growth [7] Financial Projections - Revenue projections for 2024, 2025E, 2026E, and 2027E are RMB 22,047 million, RMB 21,877 million, RMB 23,029 million, and RMB 24,504 million respectively, with a year-over-year decline of 17.01% in 2025E but a growth of 6.41% in 2027E [3] - The net profit attributable to the parent company is projected to be RMB 1,684 million in 2024, RMB 1,553 million in 2025E, RMB 1,790 million in 2026E, and RMB 2,051 million in 2027E, reflecting a compound annual growth rate of 7% over three years [8] - The company’s EPS is expected to be RMB 2.42 in 2024, RMB 2.23 in 2025E, RMB 2.58 in 2026E, and RMB 2.95 in 2027E [3][8] Valuation Adjustments - The company has adjusted its profit forecasts for 2025-2027, reducing the net profit estimates by 10.3% for 2025E, 10.2% for 2026E, and 10.2% for 2027E, primarily due to lower LNG/LPG prices and asset disposal income [8] - The target price has been raised to RMB 37.4 from RMB 36.4, based on a revised valuation of 14.5x PE for 2026 [8]