Main points of investment
China Nengjian released its third quarterly report for 2023: the company's 2023Q1-Q3 achieved operating income of 285.313 billion yuan, an increase of 18.00% over the same period last year, a net profit of 3.073 billion yuan, a decrease of 26.72% over the same period last year, and a net profit of 2.885 billion yuan after deduction, an increase of 1.45%. Of this total, Q3 realized operating income of 93.193 billion yuan, an increase of 11.61% over the same period last year, a net profit of 416 million yuan, a decrease of 70.01% over the same period last year, and a net profit of 537 million yuan, a decrease of 50.20% over the same period last year.
2) the company's R & D expenditure increased by 1.909 billion yuan compared with the same period last year, and the expense rate increased during the period. 3) when the spin-off listing of 2023Q1-Q3 was completed in 2023, the increase in the proportion of minority shareholders led to the dilution of the net profit, and the decrease of the net profit of Epley was significantly less than that of the company.
Since the beginning of this year, the order performance of the company has been outstanding, and the growth rate of new energy and comprehensive smart energy and urban construction business orders has rebounded significantly. In the first three quarters of 2023, the company signed a total of 941.505 billion yuan in new contracts, an increase of 35.53 percent over the same period last year, of which Q3 newly signed increased by 82.6 percent.
The increase in gross profit margin and the decrease in net interest rate are mainly affected by the high base of net investment income and the increase in expense rate in the same period last year.
The company's expense rate during the 2023 Q1-Q3 period increased 0.23pct compared with the same period last year. The main reason may be 1) the company increased its R & D investment, the R & D expenditure increased by 1.909 billion yuan compared with the same period last year, and the R & D expenditure rate increased by 0.35pct. 2) the company increased its investment intensity, and its financial expenses increased by 699 million yuan compared with the same period last year.
The focus of the future: make every effort to create the "first development engine" of new energy. 1) the "investment and construction" integration of new energy is vigorously promoted, which will help to thicken the company's profits from a medium-and long-term perspective. 2) New industries will be promoted in an orderly manner, and energy storage and hydrogen energy will be expected in the future.
Profit forecast and rating: we adjust the profit forecast for the company, and it is estimated that the net profit of the company from 2023 to 2025 is 7.289 billion yuan / 8.726 billion yuan / 10.282 billion yuan respectively, EPS is 0.17 yuan / 0.21 yuan / 0.25yuan respectively, and the PE corresponding to the closing price on October 27 is 12.7,10.6 times and 9.0 times respectively, maintaining the "overweight" rating.
Risk hints: macroeconomic downside risks, infrastructure investment less than expected risks, new energy construction investment less than expected risks, newly signed orders less than expected risks.