Citi has released a research report maintaining its target price of HK$9.5 and Buy rating on CIMC ENRIC (03899).

The bank noted that it recently engaged with the management of CIMC ENRIC, and compared to the interim results announcement in August this year, management provided more quantitative medium-to-long-term targets, particularly regarding development plans in the offshore clean energy and integrated services sectors, with an overall positive view.

The report mentioned that management expects shipbuilding revenue to increase from approximately RMB 6.4 billion in 2025 to RMB 7.5-8 billion in 2026, and reach approximately RMB 10 billion around 2028. Net profit margin is expected to rise from approximately 5% in 2025 to approximately 7%/8%-10% in the first half/medium term of 2026. Shipyard facility plans will continue through mid-2029, with a current order backlog of 50 vessels.

The order structure is being upgraded from the low-value bulk carrier orders accepted in the early cycle. The coke oven gas project is becoming an important source of recurring revenue, with project-level net profit margin exceeding 12%, internal rate of return exceeding 15%, and utilization rate exceeding 80%.