LK(SH:600388) GUOTAI HAITONG SECURITIES·2026-03-23 08:30Investment Rating - The investment rating for the company is "Accumulate" [6][19]. Core Insights - The company, Longjing Environmental Protection, has shown steady growth in 2025, with its core environmental business maintaining high order levels. The green electricity segment has begun to contribute significantly to profits, while energy storage cells have achieved profitability, and mining trucks have made product breakthroughs. The new energy sector is entering a phase of accelerated profit realization [2][12]. Financial Summary - Total revenue for 2025 is projected at 11,872 million yuan, representing an 18.5% increase from 2024. The net profit attributable to shareholders is expected to reach 1,112 million yuan, a 33.9% increase year-on-year. The earnings per share (EPS) for 2025 is estimated at 0.88 yuan [5][12]. - The company’s comprehensive gross margin for 2025 is 25.17%, reflecting a year-on-year improvement of approximately 0.33 percentage points, indicating a steady enhancement in profitability [12]. - The company’s cash flow from operating activities is projected at 16.18 billion yuan, despite a 26% year-on-year decline, maintaining a good level [12]. Business Segments - The environmental protection business has a robust order backlog, with new contracts for environmental equipment engineering amounting to 10,258 million yuan in 2025. The order reserve for environmental equipment engineering contracts stands at 18,890 million yuan [12]. - In the new energy sector, green electricity projects have started to yield significant profits, with operational capacity reaching approximately 1.2 GW. The energy storage cell business has also become profitable, with around 8 GWh delivered in 2025 [12]. Valuation and Target Price - The target price for the company has been raised to 24.00 yuan, based on a 20x price-to-earnings (PE) ratio for 2026, reflecting the accelerated profit realization in the new energy business [12][14].