Sante(SZ:002159) GUOTAI HAITONG SECURITIES·2026-02-24 08:45Investment Rating - The report assigns a rating of "Buy" to the company with a target price of 28.80 CNY [4]. Core Insights - The company is positioned as a leading operator in the cableway industry, benefiting from strong profitability in core projects and the optimization of governance structures following state-owned capital entry. This has opened up growth opportunities through new projects and the renovation of existing ones [2][10]. - The tourism industry is experiencing a robust recovery, with the cableway sector characterized by high barriers to entry and profitability. The company is actively expanding into light asset businesses such as cableway management and technical consulting, which are expected to further enhance growth potential [10][14]. Financial Summary - Total revenue is projected to be 719 million CNY in 2023, with a forecasted decline to 692 million CNY in 2024, followed by a gradual increase to 882 million CNY by 2027. The net profit attributable to the parent company is expected to rise from 128 million CNY in 2023 to 207 million CNY in 2027 [3][10]. - The earnings per share (EPS) is forecasted to increase from 0.72 CNY in 2023 to 1.16 CNY in 2027, reflecting a positive growth trajectory [3][10]. - The company’s return on equity (ROE) is projected to improve from 10.1% in 2023 to 12.0% in 2027, indicating enhanced profitability [3][10]. Business Performance - The company’s core cableway operations are expected to generate significant revenue, contributing approximately 97.33% of total revenue in 2024, with a net profit margin of 57.43% for the Fanjing Mountain cableway and 34.03% for the Huashan cableway [10][14]. - The company has seen a substantial recovery in revenue, with a 180.67% increase in 2023 compared to 2022, returning to pre-pandemic levels [31][36]. Governance and Financial Structure - The entry of state-owned capital has led to improved governance and a significant reduction in the debt ratio from 38.03% in 2022 to 23.62% in 2024, alongside a dramatic decrease in financial expenses [10][14]. - The company’s financial structure is expected to continue improving, with a focus on optimizing asset quality and reducing losses from underperforming projects [19][29]. Future Growth Potential - The company is focusing on the renovation of existing projects and the development of new ones, with the Zhuhai project expected to see profits increase by over six times post-renovation. The Qian Dao Lake project is also anticipated to contribute over 40 million CNY in net profit upon completion [10][19]. - The company is well-positioned to benefit from national policy incentives aimed at upgrading special equipment, which may include further renovations of existing projects [10][19].