Event: The company released its 2023 annual report.
Non-net profit after deduction grew at a high rate, and new orders increased steadily. In 2023, the company achieved operating income of 3.388 billion yuan, an increase of 21.08% over the previous year; realized net profit of 488 million yuan, an increase of 10.26% over the previous year; realized net profit of 526 million yuan after deduction, an increase of 22.04% over the previous year. In 2023, the company signed a total of 4.582 billion yuan of new contracts, an increase of 13.80% over the previous year. By business type, the total amount of new contracts signed in the survey and design business was 2,268 billion yuan, an increase of 0.32% over the previous year; revenue was 2,081 billion yuan, an increase of 16.54% over the previous year. The total amount of new contracts signed for the engineering management business was 225 million yuan, an increase of 8.91% over the previous year; revenue was 147 million yuan, an increase of 10.06% over the previous year. The general engineering contracting business signed a new contract amount of 2,089 billion yuan, an increase of 34.21% over the previous year; achieved revenue of 1,148 billion yuan, an increase of 31.29% over the previous year. By region, the total amount of new contracts signed in Anhui Province was 3,570 billion yuan, an increase of 13.51% year on year; revenue reached 2,815 billion yuan, an increase of 31.74% year on year. The total amount of new contracts signed outside of Anhui Province was 1,012 billion yuan, an increase of 14.77% year on year; realized revenue of 561 million yuan, a year-on-year decrease of 14.61%. At the end of the year, the company's total order amount was 8.577 billion yuan, an increase of 12.75% over the end of 2022, with sufficient orders in hand.
Gross profit margins have increased. The company's gross margin in 2023 was 33.78%, up 2.04 pct year-on-year. Among them, the gross margins of survey and design, engineering management, and general engineering contracting businesses were 46.84%, 18.74%, and 12.04% respectively, up 4.89pct, 0.09pct, and 0.86pct, respectively. By region, the domestic gross margin of Anhui Province was 34.06%, up 2.05 pct year on year, and the external gross margin of Anhui Province was 32.38%, up 1.51 pct year on year. In 2023, the company's net profit margin was 14.58%, down 1.30pct year-on-year. The company's net operating cash flow in 2023 was 273 million yuan, a year-on-year decrease of 43.57%, mainly due to current project payments higher than the same period last year.
Lay out a low-altitude economy, focus on new quality productivity, and accelerate digital transformation. Recently, the four departments jointly issued the “Implementation Plan for Innovative Application of General Aviation Equipment (2024-2030)” to develop the general aviation manufacturing industry, accelerate the innovative application of aviation equipment, and promote the development of the low-altitude economy. The company established a low-altitude economy earlier in Anhui Province. During the reporting period, it obtained the Shucheng General Airport Site Selection Research Phase Consulting Service Project, the Lanling County General Airport Early Work Expense Project, the Zongyang County General Airport Site Selection and Early Research Phase Consulting Service, Dongzhi County General Airport Site Selection Research Phase Consulting Service, Qingyang General Airport Site Selection Research Phase Consulting Service, and the Huzhou South Taihu (Wuxing) General Airport General Administration Project, etc., with a new contract amount of 34 million yuan. The company attaches great importance to the application and practice of cutting-edge technologies such as big models and digital twins in various business fields, and continues to promote digital intelligence to enhance efficiency. It has achieved results in business fields such as big data and cloud business, smart transportation R&D and consulting, digital construction technology, and mechatronics and informatization integration. In 2023, it signed a new intelligent business contract worth 59 million yuan. In the future, the company will continue to promote the construction of engineering digital intelligence technology and service platforms, focusing on building “one center, four major systems”, and empowering enterprises to improve quality and efficiency in all aspects through industry-leading data resource centers and collaborative platform solutions.
Investment advice: The company's revenue for 2024-2026 is expected to be RMB 3,944 billion, RMB 4.662 billion and RMB 5,535 billion respectively, with year-on-year increases of 16.42%, 17.68%, and 19.24%, respectively. Net profit to mother is 562 million yuan, 656 million yuan, and 737 million yuan, respectively, up 15.17%, 16.69%, 12.33% year-on-year, EPS is 1.00 yuan/share, 1.17 yuan/share, and 1.31 yuan/share, respectively. The PE corresponding to the current stock price is 9.89 billion yuan Times, 8.47 times, and 7.54 times, maintaining the “recommended” rating.
Risk warning: Risk of order fulfillment falling short of expectations; risk of accounts receivable recovery falling short of expectations.