XREC(SZ:000598) Changjiang Securities·2024-04-21 05:32Investment Rating - The investment rating for the company is "Buy" and is maintained [7][9]. Core Views - In 2023, the company achieved a revenue of 8.087 billion yuan, a year-on-year increase of 5.99%, and a net profit attributable to shareholders of 1.843 billion yuan, a year-on-year increase of 13.97% [6][9]. - The growth in performance is driven by new capacity investments, with contributions from wastewater treatment and solid waste management businesses [6][9]. - Looking ahead to 2024, the company expects revenue growth supported by price increases in wastewater services, project completions, and geographical expansion [6][9]. Summary by Sections Financial Performance - The company reported a net profit of 1.843 billion yuan in 2023, reflecting a 13.97% increase year-on-year. The non-recurring net profit was 1.804 billion yuan, up 14.65% year-on-year [6][9]. - In Q4 2023, the company recorded a revenue of 2.396 billion yuan, a decrease of 10.87% year-on-year, while the net profit rose by 45.64% to 353 million yuan [6][9]. Business Growth Drivers - New operational projects include the second phase of the Chengdu Seventh Reclaimed Water Plant (500,000 tons/day) and the second wastewater treatment plant in Chengdu High-tech West District (8 tons/day) [6][9]. - The company is expanding its market presence in the Chengdu metropolitan area, estimating an increase of approximately 1.64 million tons/day in water supply and 1.17 million tons/day in wastewater treatment capacity [6][9]. Dividend Policy - The dividend payout ratio for 2023 was 27.5%, an increase of 6.86 percentage points from 2022, with a dividend yield of 2.48% [6][9]. Future Profit Forecast - The projected net profits for 2024, 2025, and 2026 are 2.14 billion yuan, 2.345 billion yuan, and 2.553 billion yuan, representing year-on-year growth rates of 16.1%, 9.5%, and 8.9% respectively [7][9].