China Energy Construction released its semi-annual report for 2023: the company 2023H1 achieved operating income of 192.120 billion yuan, an increase of 21.37% over the previous year (adjusted, same below); realized net profit of 2,658 billion yuan, a year-on-year decrease of 5.34%; achieved net profit of 2,348 billion yuan after deduction, an increase of 32.97% over the previous year. Among them, Q2 achieved operating income of 103.604 billion yuan, an increase of 19.07% over the previous year, and realized net profit of 1,526 billion yuan, a year-on-year decrease of 17.39%.
The company signed a new contract of 645.929 billion yuan in 2023H1, an increase of 21.24% over the previous year. By region, the amount of new domestic and overseas contracts signed was 486.351 billion yuan and 159.578 billion yuan respectively, up 24.91% and 11.28% year-on-year respectively.
The company achieved revenue of 192.120 billion yuan in 2023H1, an increase of 21.37% over the previous year. As a leader in energy and power, the company has greatly benefited from the growth of domestic investment in new energy and thermal power projects, and has actively played an investment-driving role to achieve steady revenue growth.
In 2023H1, the company achieved a comprehensive gross profit margin of 10.93%, an increase of 0.83 pct over the previous year; a net interest rate of 2.36%, a year-on-year decrease of 0.20 pct. Expenses for the period were 13.992 billion yuan, accounting for 7.28% of the revenue side, a year-on-year decrease of 0.04 pct. Asset+credit impairment losses were 675 million yuan, accounting for 0.35% of revenue, an increase of 0.22 pct over the previous year. 2023H1's net operating cash flow per share was -0.33 yuan, the same as the previous year.
Future highlights: 1) Make every effort to build the “first development engine” of new energy and promote rapid growth in performance: vigorously promote “investment, construction and management” of new energy to increase the company's revenue and profit. New industries are being promoted in an orderly manner, and the future of energy storage and hydrogen energy can be expected. The spin-off, restructuring, and listing of E-Pli helped improve financing efficiency in the commercial sector, and also helped the company further focus on its core business. 2) The 10th anniversary of the “Belt and Road” has started again, and the company is worth looking forward to as an international engineering leader.
Profit forecast and rating: We adjusted our profit forecast for the company. We expect the company's EPS for 2023-2025 to be 0.22 yuan, 0.26 yuan, and 0.30 yuan respectively. The PE corresponding to the closing price on August 30 will be 10.5 times, 8.9 times, and 7.7 times, respectively, maintaining the “increase in holdings” rating.
Risk warning: macroeconomic downside risk, risk of infrastructure investment falling short of expectations, risk of investment in new energy construction falling short of expectations, risk of new orders falling short of expectations.