CICC has released a research report, largely maintaining its net profit forecast for CIMC ENRIC (03899) at RMB 1.509 billion for 2026 and initiating a forecast of RMB 1.628 billion for 2027. The current share price corresponds to a price-to-earnings ratio of 13.1x for 2026 and 12.0x for 2027. The firm has reaffirmed its Outperform rating. However, due to an upward shift in the industry's valuation benchmark, the target price has been raised by 33.3% to HK$12.00. This new target implies a P/E ratio of 14.9x for 2026 and 13.7x for 2027, suggesting a potential upside of 13.7% from the current share price.

The key points from CICC's report are as follows: The company reported its 2025 financial results, with revenue reaching RMB 26.326 billion, a year-on-year increase of 6.3%. Net profit attributable to shareholders was RMB 1.135 billion, up 3.7% compared to the previous year.

In 2025, revenue from the chemical environment segment was RMB 2.141 billion with a gross margin of 13.0%. The liquid food segment generated revenue of RMB 3.620 billion, achieving a gross margin of 21.7%, which increased by 0.3 percentage points year-on-year.

Revenue from the clean energy segment saw substantial growth, driven by both land and marine applications. Clean energy revenue for 2025 totaled RMB 20.565 billion, surging 19.7% year-on-year. Within this segment, land-based clean energy business revenue was RMB 13.43 billion, up 15.1%; marine clean energy business revenue reached RMB 6.41 billion, a significant increase of 37.6%; hydrogen energy business revenue was RMB 720 million, declining by 15% compared to the prior year. The overall gross margin for 2025 was 12.7%, a slight improvement of 0.1 percentage points.

The company demonstrated robust growth in its order backlog, with integrated service projects advancing steadily. Total new orders secured in 2025 amounted to RMB 26.29 billion, with new orders in the fourth quarter calculated at RMB 6.649 billion. The order backlog as of the end of 2025 stood at RMB 29.75 billion, an increase of 5% year-on-year, which is viewed as laying a solid foundation for the steady realization of future performance.

By business segment, new orders in 2025 for clean energy, chemical, and food were RMB 22.23 billion, RMB 2.66 billion, and RMB 1.40 billion, representing year-on-year changes of +2%, -11%, and -48%, respectively. However, new orders for both the chemical and food segments showed year-on-year growth in the fourth quarter of 2025. Concurrently, the company continues to implement integrated service projects, which are expected to contribute positively to future earnings.

Risk warnings include a potential continued downturn in chemical environment demand and new business scaling up slower than anticipated.