Event: On August 31, the company released its 2023 semi-annual report.
New contracts for traditional energy continue to be stable, and the growth rate of new energy revenue is impressive. In 2023H1, the company achieved revenue of 192.120 billion yuan, a year-on-year increase of 21.37%. Net profit of 2,658 million yuan was 2,658 billion yuan, down 5.34% year on year, net profit after deducting 2,348 billion yuan, an increase of 32.97%. Revenue growth was mainly accompanied by an increase in national investment in new energy and thermal power projects. The company's new energy and traditional thermal power engineering general contracting business grew rapidly, actively played an investment-driving role, promoted the implementation of financing and construction projects such as PPP and district development, and led to an increase in non-electrical engineering construction revenue. By business, engineering construction achieved revenue of 16.329 billion yuan, an increase of 22.94%, of which new energy revenue increased 57.93%; industrial manufacturing achieved revenue of 15.468 billion yuan, an increase of 28.20%; investment and operation achieved revenue of 14.795 billion yuan, an increase of 26.02%, of which new energy also increased 136.02%; and survey, design and consulting achieved revenue of 6.370 billion yuan, an increase of 4.97%. At 2023H1, the company signed a new contract amount of 645.929 billion yuan, an increase of 21.24%. Among them, the amount of new contracts signed for engineering construction was 614.894 billion yuan, an increase of 22.61%; the amount of new contracts signed for survey, design and consulting services was 11.932 billion yuan, an increase of 24.69%. In project construction, traditional energy and new energy increased by 45.22% and 4.64% respectively.
Gross margin has increased. At 2023H1, the company's gross margin was 10.93%, an increase of 0.83 pct, net profit margin was 2.36%, and a decrease of 0.2 pct. By business, the gross margin for survey, design and consulting was 36.29%, up 6.31 pct, mainly benefiting from policy support such as “three 80 million” for coal power, etc., and the company's traditional energy business increased; gross margin of investment and operation was 29.06%, up 3.27 pct, mainly due to the increase in real estate gross margin of 12.95 pct, and gross margin of the new energy and integrated smart energy sector falling by 15.07 pct, mainly due to the fact that new energy demonstration projects such as solar thermal and biomass power generation were put into operation one after another. The initial operating costs of demonstration projects for demonstration projects such as solar thermal and biomass power generation were relatively high; Gross margins were 6.86% and 18.85%, respectively, up 0.09 pct and 1.26 pct, respectively.
Overseas markets are expanding at an accelerated pace, and the 10th anniversary of the “Belt and Road” has benefited. 2023H1. The amount of new contracts signed by the company overseas was 159.58 billion yuan, an increase of 11.3%. Among them, the amount of new contracts signed in Asia and Europe increased by 42.9% and 17.6% respectively, and the amount of new contracts signed in the “Belt and Road” market increased by 39.1%; the overseas new energy and integrated smart energy business also increased by 100.7%, successfully signing a number of representative projects such as photovoltaics in Uzbekistan and wind power in Saudi Arabia. On the occasion of the 10th anniversary of the “Belt and Road”, the company is expected to strengthen project cooperation with countries along the route in infrastructure and other fields, and overseas performance is expected to usher in further growth.
Investment suggestions: The company's revenue for 2023-2025 is estimated to be 432.787 billion yuan, 517.208 billion yuan, and 626.575 billion yuan, respectively, with the same increase of 18.12%, 19.51% and 21.15%, respectively, and net profit of 8.773 billion yuan, 10.493 billion yuan, and 12.221 billion yuan, respectively, with an increase of 12.34%, 19.61%, and 16.46% respectively. EPS is 0.21 yuan/share, 0.25 yuan/share, 0.29 yuan/share, corresponding to the PE division of the current stock price At 11.02 times, 9.22 times, and 7.91 times, the “recommended” rating was maintained.
Risk warning: the risk of orders falling short of expectations; the risk of overseas business expansion falling short of expectations.