23H1's revenue/net profit was -18.1%/+4.4%, maintaining the “buy” rating company 23H1 to achieve revenue of 705 million, -18.1% year-on-year, and net profit of 70 million yuan, +4.4%, exceeding our expectations (54 million), mainly due to a significant drop in Q2 cost pressure. 23Q2 revenue/net profit to parent was 45/70 million, -7.5%/-7.0% year-on-year. We maintain the company's net profit forecast for 2023-2025 at 169/215/259 million. The comparable company Wind unanimously expected an average value of 16xPE in '23. We believe that the company, as a leading housing construction design leader with rich project design experience, leading BIM development, and sufficient accumulation of data assets, is expected to take the lead in benefiting from AI empowerment and urban village transformation. We give the company 20xPE in '23, maintain a target price of 17.24 yuan, and maintain a “buy” rating.
23H1's overall gross margin improved, and new orders for prefabricated design increased rapidly. 23H1's gross profit margin increased by 27.2%, +0.9 pct year on year. This is mainly due to low gross margin engineering general contracting revenue of -30.6% to 0.8 million, a decrease of 2.0pct to 11.3%. At the same time, the gross margin of the cost consulting business increased by 4 pct to 21.6%. Architectural design achieved revenue of 546 million dollars, -14.5% year on year, increase of 3.2 pct to 77.4% of revenue, and gross profit margin of 31.3%, +0.1 pct year on year, of which prefabricated building design revenue was 246 million, or -0.6% year on year. 23H1 The architectural design business signed a new contract amount of 940 million yuan, +19.9%, of which 600 million dollars were newly signed for prefabricated design, +73.3%; the cost consulting business signed a new 100 million yuan, or -22.6% year on year.
23H1's cash flow improved year on year. Expense rate optimization for the 23Q2 period was clearly 16.3%, +0.7 pct year on year. Among them, the sales/management/R&D/financial expense ratio was -0.01/+0.09/+0.48/+0.15 pct. Except for financial expenses, which decreased by +32% year-on-year due to interest income, the rest of the expenses were reduced year on year. Since the decline was less than revenue, management and R&D expense rates still increased. The cost pressure dropped significantly during the 23Q2 period, from -1.8 pct to 12.4% year on year, of which the sales/management/R&D/financial expense ratio was -0.35/- 1.27/- 0.31/+0.10 pct. 23H1 impairment expenses accounted for -2.5 pct to 1.5% of revenue year over year, and net return interest rate +2.1 pct to 9.9% year over year. 23H1's net operating cash was -0.1 million, a year-on-year decrease of 160 million yuan, a year-on-year decrease of 160 million yuan, and a year-on-year payout ratio of 99.5%/40.1%, +28.9/+11.1 pct.
Pioneer in BIM development, actively expanding the field of artificial intelligence applications
The digital transformation of the construction industry is trending. At the beginning of '22, the Ministry of Housing and Construction issued the “14th Five-Year Plan” construction development plan, clarifying that the BIM technical framework and standard system will basically be formed in '25. Since 2008, the company has started BIM research, participated in the formulation of 17 relevant standards and 10 special research topics in China and Shenzhen, obtained 25 BIM-related patents, developed and launched the iBIM platform V5.07. At the same time, together with Zhongwang Software (688083 CH), actively promoted the commercialization process of BIM software, and continued to promote digital transformation based on BIM technology, accelerate AI technology development and iteration, expand AI design application scenarios, and accelerate the integration of AI technology with the entire design process.
Risk warning: Municipal infrastructure or real estate investment has slowed sharply, and improvements in human efficiency have been slower than expected.