Event: the company announced that 2023Q1-3 realized a revenue of 11.554 billion yuan with an increase of 4.00%, a net profit of 536 million yuan with a decrease of 17.80%, and a net profit of 489 million yuan with a decrease of 20.33%.

Q3 high gross margin business revenue share decline, profit release short-term pressure. From a quarterly point of view, the company's Q1-Q3 single-quarter operating income was 37.21 million yuan, respectively, and the revenue growth rate of Q3 was slower than the same period last year. This is partly due to the slowdown in steel structure sales growth due to the impact of Asian Games events and the relocation of new factories (Q1/Q2/Q3 sales growth was 8.6% compared with the same period last year + 15.7%, 11.7% and 8.6%). The single-quarter net profit of Q1-Q3 was RMB 1.80x211qpg respectively, which was mainly due to the decline in the proportion of revenue from EPC and patent franchise business, which was mainly due to the decline in the proportion of revenue from EPC and patent franchise business with higher gross profit.

New signing of Q3 business has declined, but orders for industrial construction have continued to grow rapidly. In the first three quarters of 2023, the company signed a total of 16.11 billion yuan in newly signed contracts, an increase of 10.1% over the same period last year. Among them, the amount of new orders signed by Q1/Q2/Q3 was 55.0 million yuan, 56.9 billion yuan, respectively, compared with the same period last year. + 23.4%, 47.2%, 22.0%, respectively, fell in the third quarter or was related to weak downstream demand. From the perspective of single Q3 sub-business, professional subcontract integration / industrial construction / public building / emerging business / EPC and assembly / industrial chain and strategic alliance / distributed photovoltaic / other orders are 42.7 and 27.4 paces, respectively. Year-on-year-19.70% Universe 20.40% Universe 49.80% Universe 35.90% Universe 44.20% Universe 17.80% Universe 26.10%

Profitability declined in the third quarter, and net operating cash outflow increased significantly compared with the same period last year. The company's Q1-3 gross profit margin is 13.80% with a drop of 0.86pct, and the Q1-Q3 single-quarter gross profit margin is 14.05%, 14.25%, 13.10%, year-on-year + 0.70pct/-0.52pct/-2.75pct. During the Q1-3 period, the expense rate increased by 8.93% with an increase of 0.39pct, in which the company's sales / management and R & D / financial expense rates were 1.07%, 7.39%, 0.46%, 0.15pct, 0.50pct and 0.25pct, respectively; the loss rate of asset and credit impairment-0.16% was the same as minus 0.59pct; and the net interest rate of 4.64% was reduced by 1.28pct. The net operating cash flow of 2023Q1-3 was 362 million yuan less than that of the same period last year, of which the net operating cash flow of 428 million yuan in the third quarter was 251 million yuan more than that of the same period last year. Q1-3 increased 0.54pct compared with 104.86%, and decreased 4.60pct compared with 113.01%. As of the end of September, the scale of the company's accounts receivable and bills, inventory + contract assets, accounts payable and bills, prepaid accounts + contract liabilities were 29.90,16.61x569 billion yuan respectively, compared with the year-on-year change at the beginning of the year. + 8.08%, 25.18%, 4.03%, 3.79%.

Investment suggestion: from 2023 to 2025, we expect the company to achieve an operating income of 16.407 billion yuan and a net profit of 639 million yuan. The corresponding PE is 10.74Compact 8.95Universe 7.62times, maintaining the "overweight" rating.

Risk hints: macroeconomic fluctuation risk; industry competition intensification; downstream demand fluctuation risk