The company released three quarterly reports for 2023, with revenue of 11.55 billion yuan from 1-3Q, an increase of 4.0%, a net profit of 540 million yuan, a decrease of 17.8%, a revenue of 3.83 billion yuan, an increase of 0.4%, and a net profit of 140 million yuan, a decrease of 46.8%. The company's orders increased steadily, the performance was under pressure, and the company's overweight rating was maintained.

Support the main points of rating

Revenue and net profit increased steadily and cash flow improved. The revenue of 1-3Q was 11.55 billion yuan, an increase of 4.0%, a net profit of 540 million yuan, a decrease of 17.8%, a decrease of 17.8%, a revenue of 3.83 billion yuan, an increase of 0.4%, and a net profit of 140 million yuan, a decrease of 46.8%. In terms of cash flow, the net operating cash of 1-3Q is-360 million yuan, the scale of outflow is smaller than the same period last year, and the net cash of 23Q3 is-430 million yuan, the scale of outflow is expanded compared with the same period last year.

Gross profit margin and net profit margin decreased compared with the previous month. 1-3Q company comprehensive gross profit margin 13.8%, same minus 0.8pct, net profit 4.8%, same minus 1.2pctbot 23Q3 gross profit 13.1%, same minus 2.6pct, ring drop 1.2pct, net profit 4.2%, same minus 3.3pct, ring drop 1.1pct.

Production and sales increased steadily, and orders were under pressure. 1-3Q company accumulated 16.11 billion yuan in newly signed contracts, with an increase of 10.1% and a decrease of 22.0%, with an increase of 10.1% and a decrease of 22.0%. Sales of 1-3Q steel structure products reached 902000 tons, up 11.4% with an increase of 11.4%. Sales of 23Q3 steel structure products increased by 8.7%. Due to the logistics and shutdown requirements brought about by the relocation of the company's new plant and the Hangzhou Asian Games, quarterly sales were affected. With the lifting of controls brought about by the Asian Games, there may be a certain backlog of demand released in the fourth quarter.

In the long run, EPC transformation is still the main direction of the company's development. The general trend of general contracting, the company continues to promote the transformation of EPC general contract, through the integration of the industrial chain, to provide full-chain services from design, manufacturing to construction and maintenance, continue to enhance the company's brand influence, and is expected to continuously improve market competitiveness by virtue of brand + quality.

Valuation

Considering the pressure on the company's performance under the influence of many factors, the EPC transformation may be difficult to achieve results in the short term, and some of the profit forecasts are downgraded. It is estimated that the company's 2023-2025 income will be 165.8 yuan, 185.4 yuan and 20.79 billion yuan respectively, and the return net profit will be 7.7,9.2 yuan and 1.08 billion yuan respectively; the EPS will be 0.38,0.46,0.53 yuan respectively, and the price-to-earnings ratio will be 8.9,7.5,6.4 times respectively. Maintain the company's overweight rating.

Main risks faced by rating

Raw material prices fluctuated sharply, BIPV business expansion was not as expected, and downstream demand recovery was not as expected.