lu'an EED(SH:601699) Xinda Securities·2025-10-30 11:26Investment Rating - The investment rating for Lu'an Environmental Energy (601699.SH) is "Buy" [1] Core Views - The report highlights that the company's performance in the third quarter of 2025 was under pressure due to rising costs, which significantly eroded profits. The company reported a revenue of 21.099 billion yuan for the first three quarters, a year-on-year decline of 20.82%, and a net profit attributable to shareholders of 1.554 billion yuan, down 44.45% year-on-year [1][2][4] - The company is strategically expanding its resources to address the short lifespan of existing mines. It aims to enhance its coal and coke industry scale, improve product structure, and optimize overall development strength through resource expansion, project construction, technological transformation, and mergers and acquisitions [4][7] - The company maintains a high dividend payout ratio, reflecting its commitment to shareholder returns and showcasing its long-term investment value. As of the third quarter of 2025, the company had cash and cash equivalents of 15.58 billion yuan, with a debt coverage ratio of 290%, indicating strong asset quality and a robust operational philosophy [4][5] Summary by Sections Financial Performance - In the first three quarters of 2025, the company achieved a coal output of 42.45 million tons and a sales volume of 37.58 million tons, remaining relatively stable year-on-year. However, the average selling price of coal dropped to 519.76 yuan per ton from approximately 660 yuan per ton in the same period last year [4] - The gross profit margin for coal business decreased significantly from 43% in the previous year to 36% due to increased costs, with the cost per ton of coal sold rising to 359 yuan from 298 yuan in the second quarter [4] Future Outlook - The company is expected to see a gradual increase in net profit from 2.262 billion yuan in 2025 to 2.929 billion yuan in 2027, with corresponding EPS rising from 0.76 yuan to 0.98 yuan per share. The projected P/E ratios for 2025-2027 are 20.13, 17.07, and 15.54 respectively, indicating a stable growth potential [6][7]