We maintain "Buy" and previous TP of HK$10.95. We maintain our forecasts for CIMC Enric's (the "Company") 2023-2025 shareholders' net profit at RMB1,228 mn / RMB1,498 mn / RMB 1,761 mn, respectively. We maintain our forecasts for the Company's earnings per share in 2023/ 2024/ 2025 at RMB0.605, RMB0.738, and RMB0.867, respectively. Our TP represents 15.9x/ 13.1x/ 11.1x 2023-2025 PE ratio and 2.0x 2023 PB ratio.
The Company's revenue remained solid growth in 3Q23. The Company's revenue in 3Q23 was RMB5.88 billion, an increase of 11.6% YoY. The Company's revenue in the first nine months of 2023 was RMB16.64 billion, an increase of 17.0% YoY. Dragged down by the weak performance of chemical and environmental segment and liquid food segment, the Company's overall growth rate declined in 3Q23. However, we believe that with the delivery of orders in 4Q23, the full-year performance may still maintain rapid growth.
Demand from both the domestic and overseas markets boosts the growth of the Company's clean energy business. The Company's clean energy business achieved revenue of RMB 9.98 billion in the first nine months of 2023, an increase of 33.9% YoY. While the Company's clean energy business revenue was RMB3.69 billion in 3Q23, increased by 33.2% YoY. With the recovery of the Chinese economy and the drop in natural gas prices, the demand for LNG in the Chinese market has recovered significantly, which boosted the sales of the Company's storage and transportation equipment such as LNG storage tanks and CNG trailers. The clean energy segment remained the top grossing segment and contributed 62.8% of the Company's total revenue during 3Q23.
The Company continues to implement its long-term plan in the hydrogen energy industry, and its hydrogen energy business maintains rapid growth. In the first nine months of 2023, the Company's hydrogen energy business achieved revenue of RMB436 million, an increase of 62.7% YoY. The Company's hydrogen energy business revenue target for 2023 is RMB700 million. Since the Company has RMB419 million of backlog orders in hydrogen energy business, and most of them will be delivered in 4Q23, total revenue of its hydrogen energy business is highly likely to exceed RMB700 million in 2023.
Catalysts: Changes in the overseas energy landscape could bring development opportunities; the hydrogen energy business has huge development potential; LNG price may decrease.
Risk factors: Demand for clean energy may be lower than expected; raw material prices may rise.