LK(SH:600388) Changjiang Securities·2024-03-24 16:00Investment Rating - The report maintains a "Buy" rating for the company [3][5]. Core Insights - The company has implemented a dual-driven strategy focusing on "environmental protection + new energy," with strong order acquisition capabilities in its core environmental business. The green electricity and energy storage sectors are expected to contribute positively to performance starting in 2024 [5][12]. - The company reported a revenue of 10.97 billion yuan in 2023, a year-on-year decrease of 7.64%, and a net profit attributable to shareholders of 509 million yuan, down 36.74% year-on-year, primarily due to goodwill impairment in hazardous waste management [9][14]. - The company has a robust order backlog, with new environmental protection orders increasing by 5% year-on-year, and it secured 1.56 billion yuan in energy storage orders, demonstrating its order acquisition capabilities [9][17]. Financial Performance - The company achieved an operating profit of 916 million yuan in 2023, with a gross margin of 23.7%, reflecting a slight year-on-year increase despite challenges in the hazardous waste sector [10][11]. - Operating cash flow improved significantly, reaching 1.71 billion yuan in 2023, a year-on-year increase of 104.4%, with a cash collection ratio of 73.3% [11]. - The company’s total liabilities to assets ratio was 68.58% at the end of 2023, a decrease of 2.74 percentage points year-on-year, indicating a solid financial position [11]. Future Outlook - The company is expected to achieve net profits attributable to shareholders of 1.21 billion yuan, 1.46 billion yuan, and 1.76 billion yuan for 2024, 2025, and 2026, respectively, representing year-on-year growth rates of 137.6%, 21.1%, and 20.1% [5][21]. - The company is actively developing new growth areas such as carbon capture, hydrogen production, and lithium extraction technologies, which are anticipated to enhance future revenue streams [12][13].