Incidents:

The company released its 2022 annual report. In 2022, revenue of 2.80 billion yuan was achieved, an increase of 18.7% over the previous year; net profit of Fumo was 440 million yuan, an increase of 14.0% over the previous year; after deducting net profit of 430 million yuan, an increase of 17.5% over the previous year.

Comment:

There has been a steady increase in performance, and there are sufficient orders in stock. The company continued to strengthen its operation and development efforts in 2022 and achieved good results in both domestic and foreign markets, achieving revenue of 2,137 billion yuan/657 million yuan respectively, an increase of 20.28%/13.82% over the previous year. A new order of 4,027 billion yuan was signed in 2022, and the number of in-hand orders at the end of the year was 7.607 billion yuan, an increase of 14.59% over the previous year.

The cash flow performance was excellent, with a planned dividend of 248 million yuan with a dividend rate of 56%. The company achieved net operating cash flow of 480 million yuan in 2022, an increase of 184.7% over the previous year. The company plans to pay a cash dividend of 0.53 yuan per share, totaling 248 million yuan. The dividend rate will reach 56%, and use capital reserve to transfer 2 shares for every 10 shares to all shareholders. If the dividend plan is successfully implemented, the dividend rate will reach 5.06% at current prices.

An equity incentive plan has been implemented to promote a win-win situation for enterprises and employees. The company has a team of highly qualified talents, accounting for 80% of highly educated people with a bachelor's degree or above. The company implemented equity incentives in 2022, awarding 1.33 million restricted shares to 277 incentive recipients. Restricted stocks are subject to conditions for lifting sales restrictions, and performance assessment targets are set for return on net assets, compound net profit growth rate, and accounts receivable turnover ratio, which is expected to fully stimulate the potential of the management team.

Actively carry out digital transformation. In 2022, the company's new base data room and 1,000 cloud desktops in the second phase of the cloud platform were completed and put into use one after another, basically making the headquarters's survey and design business fully accessible to the cloud; promoting the collaboration of business work; and initially achieving full coverage of the knowledge base and collaborative business system in all fields. The company continues to promote the construction of digital design institutes, and subsequent improvements in quality and efficiency can be expected.

The first coverage gave an “increase in holdings” rating. The EPS from 2023 to 2025 is expected to be 1.05 yuan/1.18 yuan/1.30 yuan, and the corresponding PE is 9.95 times/8.88 times/8.05 times.

Risk warning: macroeconomic risk, accounts receivable risk, company performance falls short of expectations