Event: the company released the third quarter report of 2023. 23Q1-3, the company achieved revenue of 467.3 billion yuan, yoy+17.7%, to achieve home net profit / deduction of non-net profit of 81.84 billion yoy+21.9%/20.4%. 23Q3 achieved revenue of 132.9 billion yuan in a single quarter, and yoy+23.2%, realized net profit of 966 million yuan / deducted non-net profit of 966 million yuan. Yoy+15.0%/-1.8%, 's performance was in line with expectations.
High revenue and performance of 23Q3
23Q1-3, the company realized revenue of 132.866 billion yuan, yoy+23.2%, realized net profit of 966 million yuan, yoy+15.0%, deducted non-net profit of 968 million yuan, yoy-1.8%. According to the quarter, the revenue of 23Q1/Q2/Q3 is 132.9 billion yuan, and the net profit of yoy+22.4%/11.0%/23.2%, is 3.372 million yuan, yoy+25.8%/20.6%/15.0%.
The gross profit margin and expense rate remained stable, and the amount of newly signed contracts increased steadily.
In terms of gross margin: 23Q1-3, the company's gross profit margin is 9.22% 23Q1/Q2/Q3 0.39pct; on a quarterly basis, the gross profit margin of 23Q1/Q2/Q3 is 9.45% and 9.13% respectively.
In terms of expenses: 23Q1-3, the expense rate during the company period is 2.27%, which is the same as the same period last year, and the sales / management / finance / R & D expense rates are 0.43% / 1.73% / 0.11% / 2.90% 0.05pct respectively.
Cash flow: 23Q1-3, the company's operating cash flow net outflow 22.477 billion yuan, year-on-year more than 20.907 billion yuan; 23Q3, operating cash flow net outflow 7.961 billion yuan, more than 6.223 billion yuan year-on-year outflow.
Newly signed: 23Q1-3, company newly signed contract value 981.9 billion yuan, yoy+5.0%;23Q3, company newly signed contract value 260 billion yuan, yoy-9.8%; sub-business view, 23Q1-3, newly signed housing construction / infrastructure / metallurgical contract value respectively 4806 shock 1470max 1154 billion yuan, yoy + 3.1% yoy+5.0%;23Q3 3.7% 4.8% From a regional point of view, 23Q1-3, the company's newly signed overseas project contract value is 32.82 billion yuan, yoy+32.6%,23Q3, the newly signed overseas project contract value is 11.205 billion yuan, accounting for 4.3% of the total.
Basically facing well: vigorously promoting the transformation of villages in the city and speeding up the localization of debt
Vigorously promote the transformation of villages in the city, the high proportion of housing construction enterprises are expected to benefit. On July 21, the executive meeting of the State Council examined and approved the guidance on actively and steadily promoting the transformation of urban villages in super-mega-cities, which is intended to promote the transformation of urban villages in 21 super-mega-cities. Urban village reconstruction market space: the total construction area of urban villages in key cities is 920 million square meters, assuming that the demolition-construction ratio is 2, the unit construction cost is 3600 yuan / square meter, and the annual construction cost corresponding to the transformation of urban villages will reach 663.8 billion yuan. Elasticity of construction and security costs brought about by the transformation of villages in cities: in 2022, the completed investment in real estate development in key cities was 5.66 trillion. According to national data, it is assumed that construction costs account for 63% of real estate development investment, and it is calculated that the construction costs of key cities in 2022 are 3.57 trillion. Furthermore, it is concluded that the annual construction and security expenses of urban villages account for 18.6% of the construction and security expenses of key cities in 2022, and the construction enterprises are expected to benefit. 23Q1-3, the newly signed contract value of the company's housing construction sector is 480.6 billion yuan, accounting for 49% of the total.
Capital side: the acceleration of localized debt and the improvement of cash flow is expected. From a total point of view, as of October 20, according to the statistics of the issued information, 21 provinces plan to issue special refinancing bonds totaling 943.78 billion yuan, of which 726.25 billion yuan have been issued, accounting for 77.0%. Last week, 551.89 billion yuan, or 58.5%, were issued. According to the previous Caixin Weekly report in August, China plans to allow local governments to issue 1.5 trillion yuan of special refinancing bonds. The currently announced plan accounts for 62.9%, and there is still room for 556.22 billion yuan to look forward to. From a provincial point of view, Yunnan Province, Inner Mongolia Autonomous region and Liaoning Province (including Dalian, which issued bonds separately) plan to issue more than 100 billion yuan, 1076Universe 106700006 billion yuan respectively. Tianjin, Guizhou, Jilin, Hunan, Guangxi Zhuang Autonomous region and Chongqing plan to issue 40-100 billion yuan. We believe that the funds raised by special refinancing bonds are used to repay the government stock debts, and the government arrears of construction enterprises are expected to be repaid, which will lead to operating cash flow, credit impairment losses and profit improvement.
High-quality overseas mines are in production, which is expected to benefit from the warming of "Belt and Road Initiative".
High-quality overseas mines in production: 23H1, the operating income of resource development business was 4.282 billion yuan, an increase of 689 million yuan (19.18%) compared with 3.593 billion yuan in the first half of 2022. The net profit is 1.01 billion yuan and the gross profit is 34.51%. Acquisition of Pakistan copper project: in 2022, the company acquired three mining rights for the Siadik copper project in Baluchistan. According to the estimated results of phased drilling, the copper ore resources of the project are 1.014 billion tons, with an average copper grade of 0.32%.
Deeply ploughing the countries along the "Belt and Road Initiative" to build the strategic depth of metallurgical + non-steel engineering. 23Q1-Q3, the company made another important breakthrough in overseas metallurgical market development, successfully signed the 1.6 million-ton joint steel plant project of Bangladesh Anwar Comprehensive Steel Plant Co., Ltd., which will become a benchmark steel green land project in South Asia after completion; successfully signed the MMP nickel iron smelting EPC project in Indonesia, tamping the company's leading position in the global laterite nickel smelting industry.
Profit forecast and investment suggestion: considering the great potential of the company's resource development business, the promotion of urban village transformation and the acceleration of debt transformation, we expect the company's operating income from 2023 to 2025 to be 6831, 8072 and 944.3 billion yuan, an increase of 15.25%, 18.17% and 16.98% over the same period last year. The net profit is 125.33, 148.63 (previous value 144.36), 172.80 (previous value 175.24) billion yuan. Year-on-year increases of 22.01%, 18.59% and 16.26%, corresponding to EPS of 0.60,0.72,0.83 yuan. The corresponding PE of current price is 5.57,4.70,4.04 times. According to the performance of the 2023x2024 division, the total valuation of the corresponding segment amounts to 104.4 billion yuan, and the value of 35% of the segment is 50% upward. The current value is significantly undervalued and the "buy" rating is maintained.
Risk reminder event: copper mine production speed, output is not as expected, overseas business development is not as expected.