The high base effect led to a decline in profits, but the asset structure continued to optimize the company's income / return net profit of 5.528 billion yuan / 264 million yuan respectively in the first three quarters of 2023, which was 4.4% higher than the same period last year. From a quarterly point of view, 2023Q1/Q2/Q3 revenue is 1.686 billion yuan / 1.827 billion yuan / 2.014 billion yuan, respectively, compared with the same period last year. The net profit of Q3 homing is 88 million yuan / 97 million yuan / 79 million yuan, and + 0.86%, 53.32% and 22.92%, respectively, year on year. The non-parent net profit deducted by 2023Q1/Q2/Q3 is 77 million yuan / 49 million yuan / 65 million yuan respectively, which is + 42.70% + 12.91% and 13.38% respectively compared with the same period last year.

In terms of profitability, the gross profit margin / net return margin in the first three quarters of 2023 were 21.89% and 4.78%, respectively, compared with the same period last year-1.79pct/-0.33pct. In a single quarter, the 2023Q3 gross profit margin / return net profit rate is 20.80% / 3.91% respectively, which is respectively higher than that of 1.11pct/-0.99pct and 0.8pct/-1.41pct, which is speculated to be mainly due to the increase in the proportion of project contracting business with lower gross profit margin (37.23% of newly signed orders for 2023 H1 project contracting, 30.89% of revenue higher than 2023 H1, and only 4.93% of 2023 H1 project contracting business gross profit margin. Lower than the overall gross margin of 22.52%).

On the expense side, the comprehensive expense rate in the first three quarters is 15.99%, compared with the same period last year-1.65pct. In the first three quarters, the sales / management / R & D / financial expense rate was 1.02%, 11.79%, 3.22% and 0.04%, respectively, compared with the same period last year. The rate of management expenses decreased significantly compared with the same period last year, or it was mainly due to the scale effect brought about by the increase in income.

In terms of cash flow, the net operating cash flow in the first three quarters was-474 million yuan, compared with-823 million yuan in the same period last year, an increase of 349 million yuan over the same period last year, mainly due to an increase in cash receipts over the same period last year.

In terms of asset structure, the company's asset-liability ratio at the end of the third quarter was 65.23%, year-on-year-2.12pct, and the company's asset structure continued to be optimized.

The first batch of urban village reconstruction projects have been unveiled one after another, demonstrating the strength of the company in the first three quarters of 2023, with a newly signed contract value of 8.919 billion yuan, an increase of 9.42% over the same period last year. Among them, engineering design / engineering technical management services / engineering contracting / engineering investigation business signed new contracts of 43.58pm / 6.86max / 36.460.230 million respectively, respectively + 0.12% / 4.54% / 22.54% / 37.46% compared with the same period last year. They respectively account for 48.86% of the total revenue, 7.69%, 40.88%, 2.57% of the total revenue. Single Q3 engineering design / engineering technical management services / engineering contracting / engineering survey business respectively newly signed contracts

12.03 Universe 1.91 Universe 13.67 million yuan, respectively, compared with the same period last year. This is mainly due to the increased wait-and-see mood of property buyers in the third quarter, the continued downturn in market sentiment and the bottoming out of the industry. It is expected that with the issuance of additional treasury bonds to enhance infrastructure investment, downstream demand is expected to pick up.

As the leader of architectural design in Shanghai, the company is expected to benefit deeply from the transformation of the village in Shanghai. Recently, Shanghai's first batch of completed urban village renovation project "Panlong Tiandi" was unveiled, and the Environmental Institute of China Construction Group undertook the design general contract for the new public green space and underground garage project, demonstrating its strength. In addition, the three-forest wedge-shaped green space created by the company is the largest among the 36 "villages in the city" renovation projects in Shanghai.

In July this year, the "guidance on actively and steadily promoting the transformation of urban villages in super-mega-cities" was released, and the company may benefit from the accelerated promotion of urban village policies.

Give full play to the effect of digital empowerment, when the transformation of Xu Li is going on.

On July 4, Shen Lidong, deputy secretary of the party committee and president of Hua Jian Group, led a special investigation and research group on the progress of the digitization transformation and digitalization of Huajian Digital Innovation. Combined with the specific work and the reality of enterprise development, the research group carried out in-depth research and exchange from the aspects of digital information management platform construction, digital workshop construction, ArcOS product delivery capability in the whole process and the drive of digital transformation. Further sort out the problem list and study the solution path. The company continues to focus on emerging development business, strengthen technological innovation, and effectively transform scientific research achievements into productive forces.

Profit forecast

We maintain the company's performance forecast that the main income from 2023 to 2025 is 94.91,110.64 and 12.919 billion yuan respectively, and the EPS is 0.61,0.83,1.09 yuan respectively. The current stock price corresponds to PE of 9.1,6.7,5.1 times respectively. Considering that the company is a digital leader in design, we give it a "buy" rating.

Risk hint

1) the risk of market demand recovery is less than expected; 2) the market competition aggravates the risk; 3) the digital transformation is less than expected risk.