Event: On January 9, 2024, the company released the 2023 performance forecast and the fourth quarter of 2023 business briefing.
Net profit after deduction is growing at a high rate, and new international engineering orders are growing rapidly. For the full year of 2023, the company expects to achieve operating income of 116.61-12.632 billion yuan, a year-on-year increase of 20%-30%; it is expected to achieve net profit of 340 to 360 million yuan, an increase of 1.79% — 7.78%; it is expected to achieve non-net profit deducted for the full year of 2023, an increase of 35.17% to 62.20% year on year; total profit of 520-540 million yuan, an increase of 10.96%-15.22% year on year. This estimated performance has not been audited. In 2023, the total amount of new contracts signed by the company was 21.985 billion yuan, an increase of 13.09% over the previous year. Among them, the total amount of new contracts signed for international engineering business was 16.380 billion yuan, an increase of 27.99%; the total amount of new contracts signed for domestic engineering contracting business was 1,327 billion yuan, a decrease of 47.55% year on year; the total amount of new contracts signed for consulting and design business was 2.188 billion yuan, a decrease of 5.40%; the total amount of new contracts signed for equipment manufacturing business was 1,815 billion yuan, an increase of 0.83% year on year; and the total amount of new contracts signed for engineering investment and operation business was 275 million yuan.
The “Belt and Road” has achieved great results, and overseas projects are progressing smoothly. The company has been working in the field of international engineering for many years and has accumulated rich experience in the execution and management of overseas engineering projects. The company insists on high-quality joint construction of the “Belt and Road”, actively participated in important conferences such as the 3rd “Belt and Road” International Cooperation Summit Forum, and promoted the signing and entry into force of various overseas markets. In 2023, the total amount of new contracts signed for the company's international engineering business was 16.380 billion yuan, an increase of 27.99% over the previous year. The amount of new contracts signed in the fourth quarter was US$800 million, an increase of 204.50% over the previous year, including the Pontavet International Airport renovation and expansion project in Nicaragua, the Maputo suspension rail transit project in Mozambique, etc., and key projects such as the central crude oil and gas treatment facility in the ninth region of Iraq and the Asian Youth Stadium in Uzbekistan are progressing steadily. On January 2, the company received an advance payment for the 500,000 tons/year soda ash plant project signed by the company in Jambur Oblast, Kazakhstan. The EPC contract amount was US$336,580,609. The scope of the project includes supporting facilities such as soda ash process production areas, salt and halide production areas, limestone mining areas, and residential areas.
Design consulting empowers engineering contracting, and there is broad room for growth in equipment manufacturing. After restructuring China's Zhongyuan and Beiqi Institute, the company gradually built a full value chain operation model led by first-class design consulting, supported by advanced engineering technology, and general engineering contracting as the carrier. Relying on design technology advantages, it provided comprehensive and systematic engineering construction services to owners in the fields of medical construction, energy, logistics, ecological environment, civil construction, industrial engineering, etc. 2023Q4, the company signed a new contract amount of 719 million yuan for its consulting and design business, an increase of 42.66% over the previous year. Key projects include the full-process design and consulting contract for the material genome and special environmental materials park project signed with Shenzhen **** Science City Development and Construction Co., Ltd., and the construction project of the Xiong'an Campus of Peking University People's Hospital. In terms of equipment manufacturing business, Beiqi Institute, which belongs to the company, has four major engineering business segments: passenger ropeway, intelligent storage, lifting machinery, and bulk material transportation. It is one of the enterprises with the strongest comprehensive technical strength in the lifting and transportation machinery industry in China. Key projects of Beiqi Institute include the Zhangjiakou Chongli Xueruyi Ski Resort Detachable Ropeway Project, Zhejiang Longzhimeng Liu Chunhu No. 2 and No. 7.
Investment advice: The company's 2023-2025 revenue is expected to be 119.82/141.65/16.462 billion yuan, respectively, up 23.30/18.22/ 16.22% year on year, net profit to mother is 3.55/4.11/461 million yuan, up 6.43/15.56/ 12.12% year on year, EPS is 0.29/0.33/0.37 yuan/share, respectively. PE corresponding to the current stock price is 26.91/23.28/20.77 times, respectively, maintaining the “recommended” evaluation grade.
Risk warning: Risk of order fulfillment falling short of expectations; risk of accounts receivable recovery falling short of expectations.