The company's recent situation
The company released 1Q24 revenue and order data: 1Q24 revenue was 4.635 billion yuan, a year-on-year decrease of 6.8%. The 1Q24 company signed a new order of 7.478 billion yuan, an increase of 35.7% over the previous year. By the end of the 1Q24 period, the company had orders of 26.904 billion yuan, an increase of 41.9% over the previous year.
reviews
The onshore and water clean energy boom has both increased. 1Q24 clean energy revenue increased 21% to $3.255 billion, new orders increased 100% to $6.2 billion, and on-hand orders increased 71% to $20 billion. Currently, the oil and gas price gap is widening, and the cost performance ratio of natural gas consumption is increasing. According to the National Development and Reform Commission, China's apparent natural gas consumption in 1Q24 was 107.6 billion cubic meters, +13% year over year. 1Q24's LNG vehicle bottle revenue was 250 million yuan, an increase of 15 times over the previous year, and signed 350 million yuan in orders, an increase of more than 9 times over the previous year. Thanks to the global ship replacement cycle and fuel cleaning needs, the company's water business revenue and orders increased dramatically, and 1Q24 delivered an 8,200 cubic meter LNG tanker. At the same time, along with rising ship prices and low raw material prices, we expect the profit level of the company's water business to continue to rise.
Short-term demand in the chemical sector is under pressure. 1Q24 chemical environmental revenue decreased 59% year over year to 562 million yuan, and orders decreased 71% year over year to 400 million yuan. The boom was still low. Currently, demand for dry cargo containers has climbed from the bottom, and we expect tank containers to bottom up and rise within half a year. 1Q24 liquid food revenue decreased by 12% to 818 million yuan, and orders decreased by 20% to 900 million yuan. There was a difference in the delivery pace for some projects, while on-hand orders were still full, increasing 23% to 5.9 billion yuan over the previous year.
The hydrogen energy business continues to grow at a relatively rapid pace. 1Q24 hydrogen energy business revenue was 169 million yuan, up 74% year on year, and signed 219 million yuan, up 30% year on year. Along with the rise in fuel cell vehicle sales, the company's hydrogen energy storage and transportation businesses continued to grow. In 2024, the company's first coke oven gas hydrogen production project in cooperation with Angang Steel will soon be put into operation, with an annual output of 15,000 tons of hydrogen and 10,000 tons of LNG10. The company plans to put into operation 2 more hydrogen production projects in 2025. At this point, the company's layout in the field of hydrogen energy has completed integrated construction from preparation, storage and transportation to filling. The company has guided the hydrogen energy business to achieve revenue of 10-1.2 billion yuan in 2024.
Profit forecasting and valuation
Considering weak chemical demand, we lowered the 2024 EPS forecast by 9.9% to 0.60 yuan, and introduced the 2025 EPS forecast of 0.71 yuan. The company is currently trading at 11.4x/9.1x P/E. Considering the upward shift in the valuation center, we maintain our target price of HK$9.00, which corresponds to 13.5x/10.7x 24e/25e P/E, with 18% room for growth.
risks
Demand for the chemical environment continues to decline; the volume of new business falls short of expectations.