Event: in the first three quarters of 2022, the company achieved operating income of 77.279 billion yuan, an increase of 20.27% over the same period last year, a net profit of 1.278 billion yuan, an increase of 22.72%, and a non-return net profit of 1.233 billion yuan, an increase of 24.22% over the same period last year. The comments are as follows.
Revenue grew steadily and newly signed orders for nuclear power projects landed smoothly. Quarterly revenue of 2022Q1, Q2 and Q3 increased by 23.74%, 24.47% and 12.75% respectively, while net profit increased by 25.84%, 79.14% and-5.24% respectively, and the quarterly net interest rate was 2.28%, 2.10% and 2.58% respectively. In the first three quarters of 2022, the company signed a total of 95.521 billion yuan in new contracts, a slight increase of 2.1 percent over the same period last year. On September 10 this year, the company announced the signing of the newly signed nuclear island installation contract for units 5 and 6 of Guangdong Lufeng nuclear power plant, which shows that the company's nuclear power engineering business is progressing smoothly.
The increase of gross profit margin and net profit margin and the decrease of collection lead to the deterioration of operating cash flow. In terms of gross margin, the company's gross margin in the first three quarters of 2022 increased by 0.10 pct to 8.44%. In terms of the period expense rate, the company's period expense rate is reduced by 0.20 pct to 4.90%, of which the sales expense rate is reduced by 0.02 pct to 0.03%; the management expense rate (including R & D expenses) is reduced by 0.16 pct to 3.48%; and the financial expense rate is reduced by 0.02 pct to 1.39%. In addition, the company's credit impairment loss in the first three quarters of 2022 was 606 million yuan, a sharp increase of 61.81% compared with the same period last year. Taken together, the company's net interest rate rose slightly by 0.02 pct year-on-year to 2.31% in the first three quarters of 2022. The net operating cash outflow was 14.372 billion yuan, a substantial increase of 394.13% over the same period in 2021. Among them, cash receipts decreased by 8.75 pct to 73.50%, and cash payments decreased by 0.40 pct to 83.35% compared with the same period last year.
The company's asset-liability ratio is higher than 84%, if the fixed increase and landing will optimize the company's financial structure. On September 30, 2022, the company issued a non-public stock offering plan (revised draft), which intends to issue no more than 795 million shares (including 795 million shares) to no more than 35 specific investors, including CNNC. and no more than 30% of the company's total share capital before the offering, and the issue price is not less than 80% of the company's average stock trading price for 20 trading days before the pricing benchmark. All of them are subscribed by the issuing object in cash, of which CNNC intends to subscribe for 600 million yuan, and the total amount of funds to be raised will not exceed 2.683 billion yuan (including 2.683 billion yuan). It will be used for the PPP project of Yiling section of Gangyao Road in Yichang City, 600 million yuan for the EPC project of East Dezhou Medical Center, 300 million yuan for the third phase project of Dangshan County people's Hospital, and 583 million yuan for supplementary working capital. By the end of the third quarter of 2022, the company's asset-liability ratio was 84.17%. If this plan is implemented, it will help to optimize the company's financial structure and ensure the company's sound operation and sustainable development.
Maintain earnings forecasts, target prices and ratings. The tone of steady growth continues, and the company covers industrial and civil engineering construction in an all-round way, promoting the company's steady growth. The double carbon goal promotes the rapid development of the nuclear power industry, and the company's nuclear power engineering business has maintained its leading position in the industry for a long time by virtue of its own technological advantages. We estimate that the company's EPS for 22-23 will be 0.72 yuan and 0.87 yuan respectively, maintaining a price-to-earnings ratio of 16 times for 22 years, maintaining a target price of 11.52 yuan, and maintaining a "better than the market" rating.
Risk hint. Payback risk, policy risk, economic downturn risk.
