Envicool(002837) 天风证券·2024-10-27 12:52Investment Rating - The report maintains a "Buy" rating for the company with a 6-month target price of 31.7 RMB [1] Core Views - The company's Q3 revenue reached 1.159 billion RMB, a year-on-year increase of 39.16%, driven by growth in data center temperature control and energy-saving products [1] - AI development trends are driving server power increases, making liquid cooling applications a growing trend, with the company's liquid cooling-related revenue doubling compared to the same period last year [1] - The company's gross margin for the first three quarters was 31.73%, with a net profit margin of 12.25%, showing a year-on-year improvement in profitability [2] - The company has strong domestic partnerships with major clients like Huawei and telecom operators, and has provided cooling systems for large data centers of Tencent, Alibaba, and others [2] - Internationally, the company has made breakthroughs with Intel and is expected to expand further with major clients in the computing power sector [2] Financial Performance - The company's revenue for the first three quarters of 2024 was 2.872 billion RMB, a year-on-year increase of 38.61%, with net profit attributable to shareholders reaching 353 million RMB, up 67.79% year-on-year [3] - Q3 revenue was 1.159 billion RMB, a year-on-year increase of 39.16%, with net profit attributable to shareholders of 169 million RMB, up 43.06% year-on-year [3] - The company's liquid cooling solutions have been delivered for projects exceeding 900MW, positioning it well to capitalize on industry opportunities [3] Industry and Market Position - The company is a leader in the temperature control industry, with nearly 20 years of experience, and is well-positioned to benefit from the AI-driven demand for cooling solutions [3] - The company's Coolinside liquid cooling solution has been widely adopted, with significant potential for growth in both domestic and international markets [3] Financial Projections - The company's revenue is projected to grow from 4.931 billion RMB in 2024E to 8.445 billion RMB in 2026E, with a compound annual growth rate (CAGR) of 29.62% [7] - Net profit attributable to shareholders is expected to increase from 519.99 million RMB in 2024E to 951.66 million RMB in 2026E, with a CAGR of 33.83% [7] - The company's EPS is projected to grow from 0.70 RMB in 2024E to 1.28 RMB in 2026E [7] Valuation Metrics - The company's P/E ratio is expected to decrease from 45.27x in 2024E to 24.74x in 2026E, reflecting strong earnings growth [7] - The P/B ratio is projected to decline from 8.08x in 2024E to 5.77x in 2026E, indicating improving asset efficiency [7] - The EV/EBITDA ratio is expected to decrease from 29.65x in 2024E to 17.03x in 2026E, suggesting improving valuation metrics [7]