Revenue is growing steadily, and we are optimistic about the company's medium- to long-term development potential
The company released its 23 annual report, and 23FY achieved operating income of 10.82 billion yuan, and realized net profit of 294 million yuan, net profit of +9.62% year-on-year, net profit of 250 million yuan after year, +31.41% year-on-year; Q4 achieved revenue of 3.13 billion yuan, with net profit attributable to mother and net profit of 0.45 billion yuan and 0.21 billion yuan, respectively. Non-recurring profit and loss for the full year of '23 was $44 million, a year-on-year decrease of $34 million. The company's 23 year cash dividend was 118 million, with a dividend ratio of 40.17%. The dividend rate corresponding to the closing price on April 1 was 1.11%. The company continues to cultivate the traditional advantages of the main steel structure business and actively explore overseas markets. Considering the strong downward pressure on real estate, we lowered the company's profit forecast. The company's net profit forecast for 24-26 is 3.3, 3.7, and 420 million (previous value was 52/63 million), corresponding to PE of 20.8, 18.5, and 16.2 times, maintaining a “buy” rating.
Overseas revenue grew rapidly, and gross margin improved
By business, the production and sales volume of steel structures was 159.20/1.5541 million tons, +9.82%/+32.71% year-on-year respectively, and the production and sales volume of building materials products was 468.83/4.6897 million square meters, respectively, +16.38%/+17.01% year-on-year. In 23 years, the high-rise steel structure/light steel structure/building materials product/service industry achieved revenue of 62.45/40.80/1.96/127 billion yuan, respectively, +4.7%/+38.56%/-73.05%/-9.89% year-on-year. The gross margins of the above businesses were 15.91%/14.76%/9.30%/16.43%, respectively, +0.12/-0.44/+1.03/+14.52pct. The proportion of light steel structures increased. The comprehensive gross margin was 15.4%, +2.25pct year on year, and the gross margin for the Q4 single quarter was 15.9%, -1.61 pct year on year. At a regional level, overseas revenue of 1 billion yuan was achieved, +1271.45% year-on-year, and overseas business expansion is beginning to show results.
New orders have been growing steadily, and overseas orders have reached a new peak
In '23, the company signed new orders of 17.181 billion yuan, of which the main steel structure industry signed 14.756 billion yuan, +22.55%. Among them, multi-high-rise steel structures/light steel structures/space structures signed new orders of 91, 44, 1.1 billion yuan, and 100 million yuan, respectively, +57%, -13%, and -6% year-on-year respectively; new orders for steel structure residential buildings were 100 million yuan. The revenue share of multi-layer light steel structures is expected to increase further. In terms of overseas business, the company grasped new opportunities in the history of domestic overseas travel, and achieved the signing of new overseas orders of 1,211 billion yuan throughout the year, accounting for 8.21% of the company's total annual steel structure orders, including OST Indonesia OBI nickel-iron power plant project, Mongolian high-rise building project, Mogok logistics center expansion project in Ethiopia, and the Indonesian industrial park project. The company will actively expand overseas markets and undertake more high-quality overseas projects.
The fee ratio increased slightly, and the net interest rate improved
The company's expense ratio for the 23-year period was 11.33%, +0.34pct. Among them, the sales/management/R&D/finance expense ratios were 1.17%, 3.41%, 5.18%, and 1.57%, respectively, and -0.05, -0.32, +0.45 pct, respectively. The financial expenses ratio increased 52% year over year, mainly due to the increase in interest fees for new plant conversion loans and operating financing. Asset and credit impairment losses were 184 million yuan, an increase of 59 million yuan over the previous year. Under the combined influence, the company's net interest rate was 2.98%, +0.07 pct year on year. The net amount of CFO in '23 was -561 million yuan, with a year-on-year decrease of outflow of 274 million yuan, and the current year-on-year change in payments was -13 pct and -20.2 pct.
Risk warning: Overseas business risks, steel prices fluctuate greatly, and project execution falls short of expectations.