CIMC Enric (3899.HK) Conference Call Summary Industry and Company Overview - **Company**: CIMC Enric, engaged in the design, development, manufacture, engineering, sale, and maintenance of transportation, storage, and processing equipment used in the energy, chemical, and liquid food industries worldwide [22][23] - **Industry**: Offshore clean energy, aerospace, and chemical equipment sectors Key Takeaways Offshore Clean Energy - Expected new orders and backlog for offshore clean energy could reach **Rmb10 billion** and **Rmb22 billion** in 2025, respectively, driven by strong demand for LNG bunkering vessels [1] - Management anticipates offshore clean energy revenue to increase by at least **Rmb1.0 billion** in 2026 with a **1-2 percentage points** improvement in net profit margin (NPM) [1][2] Aerospace - Aerospace revenue and orders combined just exceeded **Rmb100 million** in 2025, with strong growth expected in 2026 due to demand for Low Earth Orbit (LEO) satellites and reusable rockets, supported by government policy [1][3] - Management estimates the total addressable market (TAM) for China's satellite industry could be approximately **Rmb1.0 trillion**, assuming an average selling price (ASP) of **Rmb4 million** per satellite [3] - Aerospace product exports are projected to grow to **Rmb100 million** in 2026 from **Rmb50 million** in 2025 [3] Chemical Equipment - Positive year-over-year growth in chemical orders was noted in Q4 2025, indicating a potential turnaround after three consecutive years of revenue decline [1] Bio-Methanol - The Phase I plant for bio-methanol (50,000 tonnes per annum) began operations in December 2025, with bio-methanol priced at approximately **Rmb7,000 per tonne**, significantly higher than the **Rmb2,200 per tonne** for petrochemical-based methanol [4] Financial Projections - Earnings forecasts for 2026 and 2027 have been raised by **1%** and **2%**, respectively, reflecting higher clean energy revenue [1] - Target price (TP) has been lifted by approximately **32%** to **HK$12.5**, based on a **15x** P/E ratio for 2026E [5][11] - Expected share price return of **17.4%** and total return of **20.4%** [7] Earnings Summary - **2023 Net Profit**: **Rmb1,114 million**; **2024 Net Profit**: **Rmb1,095 million**; **2025E Net Profit**: **Rmb1,205 million**; **2026E Net Profit**: **Rmb1,504 million**; **2027E Net Profit**: **Rmb1,773 million** [6] - **2026E Diluted EPS**: **Rmb0.693**, with a growth rate of **24.8%** [6][12] Risks - Key downside risks include unfavorable policy changes regarding natural gas substitution for traditional energy sources, lower price competitiveness of natural gas, a drop in chemical product volumes, and increased competition from domestic and international peers [25] Conclusion - CIMC Enric is positioned for growth in offshore clean energy and aerospace sectors, with a positive outlook for its chemical business recovery. The company is rated as a "Buy" with a target price of **HK$12.5** based on strong fundamentals and market potential [23][24]