CIMC ENRIC(HK:03899)2024-04-26 06:32Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 9.04, indicating a potential upside of 18.5% from the current price of HKD 7.63 [1][2][8]. Core Insights - The company has achieved a record high in backlog orders, with total backlog reaching RMB 26.9 billion, a year-on-year increase of 42%. The clean energy segment's backlog alone is RMB 20 billion, up 71% year-on-year [1]. - In Q1 2024, the company's total revenue decreased by approximately 7% year-on-year to RMB 4.63 billion, primarily due to a significant decline in the chemical and liquid food segments, which saw revenue drops of 59% and 12% respectively. However, the clean energy segment showed strong growth, with revenue increasing by 21% year-on-year, driven by a 64% increase in overseas revenue [1][2]. - The clean energy segment continues to show robust order growth, with new orders in Q1 2024 doubling to RMB 6.2 billion. Notably, new orders for hydrogen products increased by 30% year-on-year to RMB 220 million [1][5]. Summary by Sections Financial Performance - Revenue projections for the company are as follows: RMB 23.63 billion in 2023, RMB 27.55 billion in 2024 (up 16.6% year-on-year), and RMB 31.79 billion in 2025 (up 15.4% year-on-year) [2][9]. - Net profit is expected to grow from RMB 1.11 billion in 2023 to RMB 1.36 billion in 2024, reflecting a year-on-year increase of 6.5% [2][9]. - The company’s earnings per share (EPS) is projected to be RMB 0.63 in 2023 and RMB 0.67 in 2024, with a growth rate of 6.5% [2][9]. Market Position - The report indicates that the market's concerns regarding the chemical and liquid food segments are largely reflected in current valuations, suggesting limited downside risk. The clean energy segment's outlook is more favorable than previously anticipated [1][2]. - The company is expected to deliver eight vessels in the clean energy segment this year, with some orders extending into 2027, providing a solid growth outlook for the next three years [1][2].