23Q3's revenue fell 3.06% from the same period last year, or due to the slow progress of land and EIA approval in the early stage of the project, the net profit of home ownership decreased by 5.98% compared with the same period last year, mainly due to the decrease in investment income and the overall soundness of the company's operation.
From January to September in 23 years, the company's orders increased by 110% to 62.6 billion yuan compared with the same period last year. Considering the order-to-revenue cycle, we expect a high increase in revenue from next year. Maintain a "buy" rating.
Matters: the company publishes three quarterly reports for 2023.
Income: Q3 revenue decreased compared with the same period last year, or affected by the slow progress of land and EIA approval in the early stage of the project. From January to September 2023, the company's revenue fell 7.9% from a year earlier, mainly due to the pressure on orders last year and the high base of revenue from some Asian Games-related projects in the first half of last year. The revenue of Q3 company decreased by 3.06% compared with the same period last year, or it was affected by the slow progress of land and EIA approval in the early stage of the project.
Orders: orders are up 110% from January to September compared with the same period last year, and we expect a high increase in revenue from next year. The order amount calculated by the company from January to September 2023 based on "newly signed contract amount + newly won unsigned contract amount" increased by 110% to 62.6 billion yuan over the same period last year, of which Q3 order volume increased by 212% to 28.3 billion yuan. The high increase in orders this year reflects that Zhejiang Province and major shareholders are expected to significantly increase their investment in transportation infrastructure in 2024-2025. Considering the cashing cycle from orders to revenue, we expect a high increase in revenue from next year.
Profit: 1) the decline in Q3 net profit compared with the same period last year is mainly due to the decrease in investment income and the overall soundness of operation. Under the same caliber (the same below), Q3's net profit fell by 18 million yuan compared with the same period last year, while investment income decreased by 42 million yuan compared with the same period last year. Investment income is the main reason for the decline in net profit compared with the same period last year, mainly due to the higher investment income contributed by the company in the second half of last year due to the disposal of long-term equity investment and BT interest income. From January to September 2023, the company's net profit deducted from non-return decreased by only 7.00% compared with the same period last year, far less than the 24.04% drop without deduction, mainly from the sale of chemical subsidiaries by the company in the first three quarters of last year and the confirmation of compensation income from real estate requisition and relocation on Xixi Road, which formed a total non-recurrent income of 224 million yuan.
Risk factors: Zhejiang Province and the company's major shareholder infrastructure investment is not as expected; the company's bid-winning project start, the pace of construction significantly slowed down; the company's project profit margin is not as expected; the company's business extension is not as expected.
Earnings forecast, valuation and rating: taking into account the pressure on the company's revenue and profits in the first three quarters of 2023, we adjust the company's profit forecast for 2023-2025 to 14051,877,750 million (the original forecast is 1,590,21,102,980 million).