Event: the General Institute of Design released its Triple report in 2023. The company's 2023Q1-Q3 realized operating income of 2.036 billion yuan, an increase of 18.61% over the same period last year, a net profit of 375 million yuan, an increase of 11.95% over the same period last year, and a net profit of 376 million yuan, an increase of 15.29%. Of this total, Q3 achieved an operating income of 613 million yuan in the quarter, an increase of 6.38% over the same period last year, and a net profit of 126 million yuan, an increase of 8.23% over the same period last year.
Q3 revenue growth has slowed down: in 2023, Q1, Q2 and Q3 achieved operating income of 680 million yuan, 742 million yuan and 613 million yuan respectively, with year-on-year changes of + 28.53%, + 21.56% and + 6.38%, respectively. We judge that the main reasons are: 1) affected by seasonal factors, the growth rate of Q3 general contract income carryover has declined from the previous month, and 2) there is a certain pressure on the availability of funds in the Q3 construction industry, which slows down the overall project promotion and carryover of the industry.
Q3 gross profit margin increased month-on-month: in 2023, the company's Q1-Q3 achieved a comprehensive gross profit margin of 37.98%, an increase of 0.99pct over the same period last year, of which Q3 single-quarter gross profit margin was 42.08%, which increased by 3.43% / 8.53% respectively compared with the same period last year, reflecting the good quality of the company's projects.
Optimistic about the rebound in infrastructure, the company is expected to benefit: we believe that major infrastructure projects in Anhui Province will remain highly intensive due to the integration of the Yangtze River Delta, and we expect that with the special refinancing and the issuance of special treasury bonds, the financial situation of local governments is expected to improve, so that major infrastructure projects are expected to accelerate the landing, and the company is expected to benefit from the core.
Profit forecast and rating: adjust the profit forecast slightly. It is estimated that in 2023-2025, the company's EPS will be 0.90 Universe 1.02 PE respectively, corresponding to the closing price on October 26 of 9.6 Universe 8.5 Universe 7.5x PE, maintaining the "overweight" rating.
Risk hints: macroeconomic downside risks, infrastructure investment in Anhui Province is not as expected, foreign business development in Anhui Province is not as expected, and the progress of the project is not as expected.