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亚厦股份(002375):23Q3盈利增强 政策利好频传 静待花开

Asia Pacific Shares Co., Ltd. (002375): 23Q3's favorable profit enhancement policies spread frequently, wait for flowers to blossom

華西證券 ·  Nov 3, 2023 16:00

Event overview: The company released the third quarter report. 2023Q1-Q3 achieved operating income of 8.822 billion yuan, +1.46% year-on-year, net profit of 249 million yuan, +7.78%, net profit of 220 million yuan, and net profit of 220 million yuan, +25.01% year-on-year; of these, Q3 achieved revenue of 3.136 billion yuan, -3.63% year-on-year, and realized net profit of 121 million yuan, +8.16% over the same period, and net profit withheld 108 million yuan, +31.97% year-on-year; non-net profit rebounded significantly. In line with market expectations. 23Q1-Q3 net operating cash flow - 1,101 billion yuan, +32.10% over the same period last year. Cash flow gradually improved.

The order structure continues to be optimized, the quantity is constantly increasing, and the quality is improving simultaneously. 23Q1-Q3 signed new orders of 10.25 billion yuan, +9.01% year-on-year, of which 9.768 billion yuan for construction (68.11/ 2,957 billion yuan), accounting for 95% of the total number of new signings; ongoing orders of 14.950 billion yuan, +5.79% year-on-year, of which 14.215 billion yuan for construction (103.44/3.871 billion yuan for public building/housing); the number of orders continued to increase. This year, the company withstood downward pressure from the industry and strictly identified and resisted poor payment and risky orders. Multiple departments are concentrating resources on projects with high-quality customers. Currently, the order structure is formed on orders mainly state-owned by the government, supplemented by high-quality industrial capital, and supplemented by orders of other nature; in terms of business format, priority is given to expanding new development needs of emerging industries, and expansion in fields such as artificial intelligence, new energy, and biomedicine. We believe that along with the continuous adjustment and optimization of downstream customers, the company's orders have not only increased in volume, but also made major breakthroughs in quality; high-quality orders have had significant effects in improving the company's profitability and strengthening cash flow.

Internal control management continued to deepen, and the cost rate decreased by nearly 1 pct over the same period last year. The gross sales margin/net profit margin of 23Q1-Q3 company was 12.24%/2.82%, year-on-year -0.69/+0.06pct, and -0.33/+1.15pct at the beginning of the year. The sales rate of 23Q1-Q3 company was 5.27%, -0.92pct, and -0.17pct month-on-month. The sales rate/management rate/finance rate was 2.13%/2.7%/0.44%, respectively, and -0.37/-0.49/0.05pct. The company's expense rate was controlled to a large extent. The “blade to the inside” effect has been reflected in specific business indicators, and will be further improved in the future in the context of continuous optimization of the company. The asset items for which the company calculated impairment preparations in the first three quarters were mainly accounts receivable, notes receivable, other receivables, contract assets, inventory and contract performance costs. Total impairment losses amounted to $1,884,700, accounting for 10.73% of the company's net profit in 2022.

? The implementation of prefabricated decoration+urban village renovation+affordable housing policies has promoted the explosion of incremental demand. In July 2023, Hangzhou required the proportion of prefabricated buildings to reach 40% by 2027, implement detailed supporting policies, and promote prefabricated decoration. We believe that prefabricated construction policies in various regions are expected to continue to be implemented to support the company's industrialization order volume, and due to the characteristics of prefabricated decoration production and installation, it is naturally compatible with urban village renovation and urban renewal; the “Shenzhen Urban Village Guaranteed Housing Large-scale Quality Renovation and Upgrading Guidelines” states, “Urban village housing renovation should adopt integration, prefabricated decoration, and encourage the use of overall bathroom, overall kitchen, prefabricated ceilings, dry construction methods such as floors, prefabricated interior walls, and integrated pipelines.” In August 2023, the State Council deliberated and passed the “Guiding Opinions on Planning and Construction of Affordable Housing”, stating that it is necessary to “promote the construction of affordable housing”. The conference clearly aimed at securing housing: 1) increasing the supply of guaranteed housing; 2) establishing a new model for the development of the real estate industry. We believe that increasing supply will have a positive effect on improving people's livelihood and expanding investment demand, and will drive demand for building decoration after the physical workload is formed; demand for building decoration is expected to explode in the future, and urban village renovation and guaranteed housing construction are government projects. In addition, prefabricated decoration will be greatly encouraged and promoted. In addition, the current building decoration industry cycle has bottomed out, the company, as a leading enterprise in the field of prefabricated construction and decoration, will be one of the first beneficiaries in this field.

Investment advice

We maintain our revenue forecast of 135.89/150.36/16.683 billion yuan for 2023-2025, net profit of 3.33/4.74/679 billion yuan, and EPS of 0.25/0.35/0.51 yuan, corresponding to a closing price of 19.83/13.94/9.73 x PE of 4.93 yuan on November 3. Maintain a “buy” rating.

Risk warning

Demand falls short of expectations, construction costs are higher than expected, new business development falls short of expectations, and systemic risks.

The translation is provided by third-party software.


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