CIMC ENRIC(HK:03899)2026-01-16 02:56CIMC 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]