The decline in performance has narrowed month-on-month, and industrial investment can be expected in the future, maintaining the “buy” rating
Sino-Singapore Group released its report for the third quarter of 2023. The company's operating income for the first three quarters of 2023 was 2.61 billion yuan, a year-on-year decrease of 15.1%, and net profit of 1.03 billion yuan, a decrease of 0.2% year-on-year. The decline in performance was narrower than in the first half of 2023. The company has strengthened balanced investment in various fields, the return on investment continues to improve, and the capital on hand is abundant to ensure the long-term development of the company. We maintain our profit forecast. We expect the company's net profit from 2023-2025 to be 17.6, 19.9, and 2.18 billion yuan, corresponding to EPS of 1.17, 1.33, and 1.45 yuan. The current stock price corresponding to PE is 6.9, 6.1, and 5.6 times, maintaining the “buy” rating.
The decline in performance has narrowed, and operating cash flow has improved markedly
The company achieved revenue and net profit of 2.61 billion yuan and 1.03 billion yuan respectively in the first three quarters of 2023, down 15.1% and 0.2% year-on-year from the same period in 2022, and the decline narrowed compared to the first half of 2023 (-21.15% and -8.47% respectively in 2023H1). Among them, the net profit achieved in the third quarter was 700 million yuan and 260 million yuan respectively, up 7.3% and 36.3% year-on-year respectively. The company's cash flow improved markedly. The company's net operating cash flow for the first three quarters was 1.41 billion yuan, up 125.7% year on year.
Balanced investment in multiple fields to drive continued growth in performance
The company achieved investment income of 260 million yuan in the first three quarters, an increase of 33.2% over the same period in 2022, mainly due to the disposal of shares in subsidiaries and an increase in long-term equity investment income. The same industrial fund investment assessed value and achieved profit and loss of 250 million yuan from changes in fair value, an increase of 166.9% over the previous year. According to the company's announcement, during the third quarter, the company added 1 new pledged investment fund, mainly in the fields of new materials such as biosynthesis and clean energy. The company will continue to strengthen balanced investment in various fields, which may further promote the leapfrog development of high-quality enterprises in the park and ensure continued growth in performance.
There are plenty of currencies in hand, and REITs are expected to boost future development
As of the end of 2023Q3, the company's on-hand monetary capital was 4.21 billion yuan, an increase of 16.3% over the end of 2022, sufficient to cover the company's short-term loans and non-current liabilities maturing within one year. At the same time, as the scope of domestic public REITs pilot assets continues to expand, it is expected that the size of the public REITs market will continue to expand in the future. The company has excellent experience in the operation and management of industrial parks, and its business meets the requirements of the REITs pilot. It is expected that individual mature projects will be successfully distributed, boosting the company's long-term development.
Risk warning: Market competition intensifies, industrial investment risks, and new energy business expansion falls short of expectations.