Incidents:
The company released its 2022 annual report. In 2022, total operating revenue was 1,760 million yuan, a decrease of 1.88% over the previous year; net profit returned to the mother was 87 million yuan, after deducting net profit of 84 million yuan from the non-return mother, turning a loss into a profit.
Comment:
The performance came out of the trough and turned a loss into a profit. The company's profit margin improved markedly. The design consulting/general engineering contracting/engineering supervision/bidding consulting business achieved gross profit margins of 34.57%/8.93%/29.09%/24.15% respectively, +1.4pct/+1.2pct/-1.5pct/+5.4pct; achieved a gross profit margin of 25.23% in 2022, -0.5pct year on year, mainly due to an increase in the share of low gross margin engineering general contracting business; net interest rate was 5.03%, turning a loss into a profit. The net interest rate was +28.2pct over the same period last year, mainly due to accounts receivable and accounts receivable, which were +28.2pct compared to the previous year The improvement in the impairment of contract assets and goodwill. Asset impairment losses and credit asset impairment losses totaled $84 million in 2022, a year-on-year decrease of $548 million.
Cash flow continues to strengthen, supporting high dividend rates. The company received about 1,925 million yuan in cash through the sale of goods and the provision of labor services. The revenue ratio was 109%, the same as the previous year, and achieved net operating cash flow of 264 million yuan. The company's cash flow performance is excellent, and capital continues to strengthen, supporting a high dividend ratio.
In mid-2022, the company paid out a cash dividend of 68 million yuan, with a dividend payment rate of 77.93%; if the dividends generated from the repurchase of shares in cash were taken into account of 27 million yuan, the total dividend amount in 2022 accounted for about 109.06% of the net profit returned to the mother.
Strengthen the incentive mechanism. The company implemented an equity incentive plan and employee stock ownership plan in 2022 to share the company's growth opportunities with core employees and continue to consolidate its human resource advantages. Among them, the equity incentive plan granted 5.05 million stock options to 146 employees, accounting for about 1.81% of the total share capital; the employee stock ownership plan transferred 5.43 million shares to 105 employees, accounting for about 1.95% of the total share capital.
Maintain an “increase in holdings” rating. Since the recovery in downstream demand for real estate lags behind previous expectations, earnings forecasts were lowered. EPS is expected to be 0.36 yuan/0.41 yuan/0.47 yuan from 2023 to 2025.
Risk warning: systemic risk, accounts receivable risk, company performance falls short