China Tianying(SZ:000035) Huaxin Securities·2024-05-05 23:30Investment Rating - The report maintains a "Buy" rating for the company [2][11] Core Views - The successful testing of the first charging and discharging unit for the 100MWh gravity energy storage project in Rudong marks a significant milestone, indicating that the company's gravity energy storage business is poised for performance release [4][5] - The company has demonstrated strong growth in its environmental operations, with a notable increase in profitability, despite a decline in overall revenue due to a drop in construction services [5][6] - The business model for gravity energy storage is becoming clearer, with sufficient orders in hand to support future growth [7][11] Summary by Sections Company Overview - As of April 30, 2024, the company's stock price is 4.68 CNY, with a total market capitalization of 11.8 billion CNY and a total share count of 2,524 million shares [2] Recent Performance - In 2023, the company reported revenue of 5.324 billion CNY, a year-on-year decrease of 20.62%, while net profit attributable to shareholders was 337 million CNY, an increase of 173.15% [4][5] - For Q1 2024, the company achieved revenue of 1.252 billion CNY, a year-on-year increase of 12.08%, and net profit attributable to shareholders of 202 million CNY, a significant increase of 339.16% [4][5] Business Segments - The environmental operations segment showed steady growth, with revenue from sanitation services increasing by 18.25% to 1.062 billion CNY and revenue from waste incineration power generation rising by 33.23% to 2.077 billion CNY [5][6] - The gravity energy storage business is in the early stages of development, with the successful testing of the first unit expected to drive future performance [4][7] Financial Projections - The company forecasts revenue growth to 6.894 billion CNY in 2024, 8.520 billion CNY in 2025, and 10.291 billion CNY in 2026, with corresponding net profits of 893 million CNY, 1.256 billion CNY, and 1.644 billion CNY respectively [10][11] - The projected EPS for 2024, 2025, and 2026 is 0.35 CNY, 0.50 CNY, and 0.65 CNY, indicating a low valuation with PE ratios of 13, 9, and 7 times [11]