We maintain our “buy” rating and our previous target price of HK$10.95. We maintain the forecast of CIMC Enrico's 2023-2025 shareholders' net profit of RMB 1,228 million/RMB 1,498 million/RMB 1,761 million, respectively. We maintain the company's 2023/2024/2025 earnings per share forecast of RMB 0.605, RMB 0.738, and RMB 0.867, respectively. Our target price corresponds to the 2023-2025 price-earnings ratio of 15.9 times /13.1 times /11.1 times the 2023-2025 price-earnings ratio and 2.0 times the 2023 net market ratio.
The company's earnings continued to grow steadily in the third quarter of 2023. The company achieved revenue of RMB 5.88 billion in the third quarter of 2023, an increase of 11.6% over the previous year. In the first nine months of 2023, the company achieved revenue of RMB 16.64 billion, an increase of 17.0% over the previous year. The company's overall growth rate slowed in the third quarter of 2023 due to the weak performance of the Chemical Environment Division and the Liquid Food Division. However, we believe that with the delivery of orders for the fourth quarter of 2023, full-year results are still likely to continue to grow rapidly.
Domestic and international market demand is driving the growth of the company's clean energy division. In the first nine months of 2023, the company's clean energy business achieved revenue of RMB 9.98 billion, a year-on-year increase of 33.9%. The company's clean energy segment revenue for the third quarter of 2023 was RMB 3.69 billion, up 33.2% year on year. As China's economy recovers and natural gas prices fall, demand for LNG in the Chinese market rebounded sharply, boosting sales of storage and transportation equipment such as the company's LNG storage tanks and CNG trailers. The Clean Energy segment remains the business segment with the highest share of the company's revenue, accounting for 62.8% of the company's total revenue in the third quarter of 2023.
The company continues to implement long-term plans for the hydrogen energy industry, and the hydrogen energy business continues to grow rapidly. In the first nine months of 2023, the company's hydrogen energy business achieved revenue of RMB 436 million, a year-on-year increase of 62.7%. The company's revenue target for the hydrogen energy business in 2023 is RMB 700 million. Since the company's on-hand orders for the hydrogen energy business reached RMB 419 million, and most of the orders will be delivered in the fourth quarter of 2023, the total revenue of the hydrogen energy business in 2023 is expected to exceed RMB 700 million.
Catalysts: Changes in the overseas energy landscape have brought development opportunities, hydrogen business development potential is huge, and LNG prices have declined.
Risk warning: Clean energy demand may fall short of expectations; raw material prices may rise.