Core views
The company released its 2023 annual report. The company achieved full-year revenue of 633.87 billion yuan, a year-on-year increase of 7.0%, and achieved net profit of 8.67 billion yuan, a year-on-year decrease of 15.6%; in the fourth quarter, the company achieved revenue of 166.55 billion yuan, a year-on-year decrease of 14.9%, and realized net profit of 490 million yuan, a year-on-year decrease of 86.4%. The company's revenue and orders grew steadily, and performance declined due to significant impairment of accounts receivable and inventory. The amount of new contracts signed by the company for the year was 1424.78 billion yuan, an increase of 6.0% year on year. Among them, the amount of new contracts signed overseas increased by 43.7% year on year, achieving a high growth rate.
occurrences
The company released its 2023 annual report. The company achieved full-year revenue of 633.87 billion yuan, a year-on-year increase of 7.0%, and achieved net profit of 8.67 billion yuan, a year-on-year decrease of 15.6%; in the fourth quarter, the company achieved revenue of 166.55 billion yuan, a year-on-year decrease of 14.9%, and realized net profit of 490 million yuan, a year-on-year decrease of 86.4%.
Brief review
Performance declined due to impairment. The company achieved annual revenue of 633.87 billion yuan, a year-on-year increase of 7.0%, and achieved net profit of 8.67 billion yuan, a year-on-year decrease of 15.6%; in the fourth quarter, the company achieved revenue of 166.55 billion yuan, a year-on-year decrease of 14.9%, and realized net profit of 490 million yuan, a year-on-year decrease of 86.4%. The reasons for the decline in the company's net profit to mother are:
1) Accounts receivable and real estate inventory accrued significant depreciation. The company accrued credit and asset impairment reserves of 8.95 billion yuan in 2023, an increase of 3.99 billion yuan over the previous year. Among them, accounts receivable were deducted by 1.70 billion yuan year on year and inventory was reduced by 1.19 billion yuan year on year; 2) The share of profit and loss of minority shareholders increased 3.4 percentage points to 24.0%.
The number of new contracts signed overseas has increased. The company's engineering/resources/real estate/specialty business achieved revenue of 5855/68/165/32 billion yuan in 2023, with a year-on-year growth rate of +9%/-23%/-25%/-2%. The overall gross margin was 9.7%, an increase of 0.05 percentage points over the previous year. The gross margin of the real estate and resource development sector declined a lot, and the gross margin of engineering and specialty businesses increased. In terms of orders, the company signed new contracts of 1424.78 billion yuan throughout the year, an increase of 6.0% over the previous year, including 63.38 billion yuan of new contracts signed overseas, an increase of 43.7% over the previous year, achieving a high growth rate.
The resource development business is affected by metal prices, and revenue has declined, and production expansion is imminent. The company's resource development business achieved revenue of 6.82 billion yuan in 2023, a year-on-year decrease of 23.1%, gross profit margin of 31.0%, a year-on-year decrease of 5.4 percentage points, which was greatly affected by the decline in average prices of metals such as nickel, cobalt, copper, and zinc. In 2024, the company's Shandak copper and gold mine extraction and expansion project was completed, and crude copper production capacity is expected to increase by 30,000 tons. Siadik Copper Mine and Enak Copper Mine are also being actively promoted. In terms of new materials, the Luoyang Sinosilicon Hi-Tech Phase II project is expected to be put into operation in the first quarter of 2024, which is expected to further increase the revenue and profit of the resource development business.
Keep the purchase rating and target price of $5.33 unchanged. The company's overall operation is steady, with steady growth in revenue and orders. The 2023 performance was greatly affected by impairment. We forecast that the company's net profit for 2024-2026 will be 94/104/11.5 billion yuan (original forecast was 135/148 billion yuan), and EPS 0.46/0.50/0.55 yuan (original forecast was 0.65/0.72 yuan), respectively, keeping the purchase rating and target price of 5.33 yuan unchanged.