Anhui Construction Engineering released its quarterly report for 2023: the company's 2023Q1-Q3 realized operating income of 59.93 billion yuan, an increase of 11.16% over the same period last year; net profit of 1.064 billion yuan, an increase of 14.46%; and net profit of 1.101 billion yuan, an increase of 27.01%. Of this total, Q3 realized operating income of 22.458 billion yuan, an increase of 11.04% over the same period last year, a net profit of 408 million yuan, an increase of 32.18% over the same period last year, and a net profit of 391 million yuan, up 33.24% over the same period last year.
The value of new contracts signed by the company in the first three quarters of 2023 was 101.52 billion yuan, an increase of 6.66 percent over the same period last year. Specifically, the newly signed contracts for capital construction projects and housing construction projects were 63.177 billion yuan and 38.343 billion yuan respectively, an increase of 10.0 percent and 1.58 percent respectively over the same period last year. Among the infrastructure projects, the newly signed contracts for roads and bridges, municipal works, water conservancy projects and port and navigation projects were 25.34 billion yuan, 34.716 billion yuan, 2.218 billion yuan and 903 million yuan respectively, with year-on-year changes of-22.18%, + 56.94%,-0.36% and + 71.67%, respectively.
The company achieved a comprehensive gross profit margin of 11.60% in the first three quarters of 2023, up 1.15pct from a year earlier, and a net profit margin of 2.41%, an increase of 0.10pct over the same period last year. The gross profit margin increased and the net profit margin remained relatively stable, mainly due to the increase in expense rate and asset + credit impairment loss compared with the same period last year.
The company spent 4.438 billion yuan in the first three quarters of 2023, accounting for 7.41% of revenue, an increase of 0.29pct over the same period last year. In terms of breakdown, the company's sales expense rate was 0.31%, up 0.07pct from the same period last year; management expense rate was 2.45%, down 0.03pct; R & D expense rate was 2.09%, up 0.29pct from the same period last year; and financial expense rate was 2.55%, down 0.04pct from the same period last year.
The company's asset + credit impairment loss in the first three quarters of 2023 was 306 million yuan, accounting for 0.51% of the revenue end, an increase of 0.37pct over the same period last year. In terms of breakdown, the asset impairment loss was 57 million yuan, an increase of 42 million yuan over the same period last year, and the credit impairment loss was 249 million yuan, an increase of 188 million yuan over the same period last year.
In the first three quarters of 2023, the net operating cash flow per share was 0.07 yuan, which was 0.72 yuan more than the same period last year. The improvement in cash flow is mainly due to the decrease in net outflow of PPP projects and the increase in net inflow of real estate business. From the perspective of income-to-cash ratio, the company's Q1-Q3 income-cash ratio in 2023 was 106.5% and 114.0% respectively, with year-on-year changes in-2.1pct and-6.6pct.
Profit forecast and rating: we adjust the profit forecast for the company, and it is estimated that the company's net profit from 2023 to 2025 will be 1.595 billion yuan, 1.808 billion yuan and 2.031 billion yuan respectively, and the PE corresponding to the closing price on October 24 will be 4.9,4.3,3.9 times respectively, maintaining the "overweight" rating.
Risk hints: macroeconomic risks are lower than expected, Anhui infrastructure investment is not as expected, real estate investment is not as expected, and construction progress is not as expected.