The company disclosed its 23-year performance forecast. Revenue of 2,385 billion yuan to 2,612 billion yuan, up 5% to 15% year on year; net profit to mother was 260 million yuan to 300 million yuan, up 4% to 20% year on year; net profit after deducting non-return to mother was 226 million yuan to 266 million yuan, up 0.6% to 18.4% year on year.

With the M&A and optimization of internal operations and management, the 23Q4 company has reached an inflection point. In the first three quarters of '23, the company's revenue growth rate continued to narrow in a single quarter (from 5.2% year-on-year increase in Q1 to 2.3% year-on-year decrease in Q3), putting a lot of pressure on growth. According to the company's forecast, the company's revenue in the Q4 quarter increased 16% to 54% year-on-year, clearly reversing the narrowing trend in the first three quarters. At the same time, Q4's net profit growth rate in a single quarter increased 36% to 77% year-on-year, and the growth rate was further expanded compared to the previous three quarters. According to our analysis, on the one hand, the company's merger and acquisition of Snoop was successfully merged in 23Q4, contributing significantly to the company's revenue and profit growth. On the other hand, the company's Q4 continued the personnel remuneration control and management optimization since Q3, and continued to achieve significant results in reducing costs and increasing efficiency.

Central state-owned enterprises breakthrough+focus on intelligent manufacturing are expected to drive the company to achieve high-quality development in 24 years.

Over the past 23 years, the company has been seizing domestic autonomous and controllable opportunities, focusing on breaking through central state-owned enterprise customers and achieving obvious results. The project volume has increased and delivery and acceptance times have been lengthened, and the pace of revenue recognition has been affected to a certain extent; however, due to the strong investment of central enterprises in the market, the company's resource investment in the intelligent manufacturing market has also weakened to a certain extent, so the growth rate of endogenous income is slightly weak. Looking ahead to 24, on the one hand, continued breakthroughs in the central state-owned enterprise market will drive the normal rotation of delivery and acceptance of related major projects, which is expected to significantly restore revenue growth. On the other hand, intelligent manufacturing driven by the demand of downstream manufacturing enterprise customers to enhance their differentiated competitiveness is still a clear trend. In anticipation of increased resource investment, intelligent manufacturing related businesses are expected to return to a higher growth rate.

Profit forecasting and investment advice. Net profit to mother is estimated to be 277 million yuan, 341 million yuan, and 434 million yuan in 23-25 years. Referring to the latest valuation of comparable companies, the company was given a valuation multiplier of 30X PE, corresponding to 24-year performance, a reasonable value of about 24.97 yuan/share, maintaining a “buy” rating.

Risk warning. The uncertainty of the market expansion of central Chinese enterprises and its impact on relevant financial indicators; the impact of fluctuations in the external environment on downstream demand; and management challenges brought about by the expansion of company personnel and scale.