23H1 revenue / return net profit year-on-year + 0.8% Universe 1.2, maintain "buy" rating company 23H1 achieve revenue of 31.2 billion, year-on-year + 0.8% (retroactive), homing net profit 1.12 billion, year-on-year + 1.2% (retroactive), basically in line with our expectations (1.08 billion), of which 23Q2 income / homing net profit 20.7% Universe 880 million, year-on-year + 1.1% Universe 1.4% (retroactive). Considering that the physical amount of infrastructure investment has landed slowly since the beginning of this year, we adjust the company's 23-25 year return net profit forecast to 28.0 shock 30.9 / 3.38 billion yuan (the previous value is 35.6 billion yuan). Comparable company 23-year Wind unanimously expected average 7xPE, approved to give the company 23-year 7xPE, the target price to 9.11 yuan (the previous value of 11.17 yuan), to maintain the "buy" rating.

23H1 comprehensive gross profit margin improved year-on-year, expansion outside the province steadily promoted 23H1 core road and bridge construction revenue of 27.9 billion, + 0.5% year-on-year, reducing 0.25pct to 89.5% of total revenue, gross profit margin year-on-year-0.07pct to 11.7%; road and bridge maintenance and construction business achieved operating income of 2.03 billion yuan,-2.7% year-on-year, accounting for 6.5% of revenue. From a regional point of view, the expansion outside the province has progressed steadily. North China achieved an income of 390 million, a year-on-year increase of + 104%, increasing its 0.64pct to 1.26%. East China achieved an income of 25.03 billion, which was the same as that of the same period last year, and its share decreased by 0.62pct to 80.2%. Taken together, 23H1's comprehensive gross profit margin increased 1.1pct to 12.2%, of which Q2 gross profit margin was 13.1%, same / month ratio + 1.3/+2.6pct.

The 23H1 expense rate increased slightly, and the proportion of impairment increased. The net interest rate was 5.3% during the 23H1 period and + 0.6pct year-on-year, with sales / management / R & D / financial expense rate + 0.0/+0.2/+0.0/+0.4pct year-on-year and financial expenses + 58.5% year-on-year. This is mainly due to an increase of 9.5 billion in interest liabilities at the end of 23H1 compared with the same period last year, resulting in a 90 million increase in interest expenditure. The proportion of impairment expenses to income is from + 0.5pct to 0.9% year-on-year. Under the comprehensive influence, the company's 23H1 return net interest rate is 3.6%, which is basically the same as the same period last year, and the 23Q2 is 4.3%, which is the same as the previous year, month-on-month + 2.0pct. The net operating cash outflow of 23H1 was 1.33 billion, an increase of 500 million compared with the same period last year, mainly due to the increase in work completed in the first half of the year, the short-term mismatch between sales payback and purchase payment time, and other cash related to operating activities increased by 2.6 billion year-on-year, with a receipt / cash ratio of 69.6%, 77.7%, and + 3.7/-2.8pct, respectively.

With the high growth of new orders signed by 23H1, Communications and Construction Group further enhanced the competitiveness of the company. The newly signed orders of 23H1 were 53.1 billion, + 141% compared with the same period last year, of which 32.8 billion were signed by 23Q2, + 126% of the same period last year. According to the Shandong Provincial Department of Communications, the province's transportation investment is 2655 RMB 3084 billion in 21-22, with a 23-year target of more than 310 billion. Steady investment in the province provides a good market for the company, while the Communications and Construction Group is included in the scope of merger in the first half of the year. Its qualifications and technical advantages are expected to form coordination with the company's road and bridge construction and maintenance business, and further enhance the company's overall market competitiveness. As of the end of 23H1, the company had 130.95 billion orders on hand, + 32% year-on-year, or about twice the revenue of 22 years, which is expected to provide support for the company's revenue recognition in subsequent years.

Risk hint: the stable growth is not as expected, and the subsequent order conversion is not as expected.