XREC(SZ:000598) Tai Ping Yang·2024-04-30 01:30Investment Rating - The report assigns a "Buy" rating for the company, indicating an expected relative price increase of over 15% compared to the CSI 300 index in the next six months [6][7]. Core Views - The company has demonstrated steady revenue growth, with a reported revenue of 8.087 billion yuan in 2023, reflecting a year-on-year increase of 5.99%. The net profit attributable to shareholders was 1.843 billion yuan, up 13.97% year-on-year [1][2]. - The company benefits from an increase in sewage treatment fees, with the average price rising from 2.15 yuan to 2.63 yuan per ton, representing a 22% increase, which is expected to enhance profit margins in the sewage treatment business [1][2]. - The company is expanding its water supply and environmental protection businesses, with operational and under-construction projects in sewage treatment and water supply reaching approximately 480,000 tons/day and 430,000 tons/day, respectively [1][2]. Financial Summary - Revenue projections for 2024, 2025, and 2026 are estimated at 9.041 billion yuan, 9.805 billion yuan, and 10.651 billion yuan, respectively, with growth rates of 11.81%, 8.44%, and 8.64% [3][5]. - The net profit for the same years is projected to be 2.130 billion yuan, 2.312 billion yuan, and 2.528 billion yuan, with corresponding growth rates of 15.53%, 8.57%, and 9.34% [3][5]. - The earnings per share (EPS) are expected to be 0.71 yuan, 0.77 yuan, and 0.85 yuan for 2024, 2025, and 2026, respectively [3][5].