Incident: In 2023, the company achieved operating income of 20.954 billion yuan, up 16.05% year on year; net profit to mother of 672 million yuan, up 36.89% year on year; net profit after deduction of 694 million yuan, an increase of 142.13% year on year, mainly due to base figures. The reviews are as follows:
The growth rate of net profit due to the Q4 quarter increased, and the total number of new orders signed in the building decoration business steadily topped the industry list and reached a record high. By industry, the company's building decoration industry and healthcare industry achieved revenue of 19.00 billion yuan and 1,053 billion yuan respectively, an increase of 16.47% and 9.51%, respectively. By region, mainland China, Hong Kong, Macao, Taiwan, and overseas (excluding Hong Kong, Macao and Taiwan) achieved revenue of 15.867 billion yuan, 22.60, and 2,825 billion yuan respectively, up 12.27%, -13.07%, and 115.11%, respectively. On a quarterly basis, the company's 2023Q1, Q2, Q3, and Q4 revenue increased by 3.99%, 21.92%, 15.59%, and 18.76%, respectively. Net profit to mother increased 76.37%, 13.91%, -56.35%, 565.60%, respectively. Net profit after deducting net profit to mother increased 11.25%, 9.97%, 173.12%, and 7470.30%, respectively; net interest rates for the single quarter were 5.37%, 2.98%, 2.38%, and 3.98%, respectively. The company signed a new order of 25.84 billion yuan in 2023, an increase of 9.70%. Among them: the curtain wall business signed a new order of 17.18 billion yuan, an increase of 21.00%; the interior decoration business signed a new order of 8.66 billion yuan, a decrease of 7.43%.
Gross profit margin increased, period expense ratio decreased, net interest rate increased, and operating cash flow improved. In terms of gross margin, gross margin increased 0.49 pcts to 17.18% in 2023, with gross margins of the building decoration industry and healthcare industry increasing 0.47 and 2.11 pcts, respectively. In terms of the period cost ratio, the cost rate for the 2023 period was reduced by 1.29 pcts to 10.38%, of which the sales expense ratio was reduced by 0.01 pcts to 1.28%; the management expense ratio (including R&D expenses) was reduced by 1.02 pcts to 8.40%; and the financial expenses ratio was reduced by 0.26 pcts to 0.70%. The total impairment of asset+credit was 405 million yuan, a year-on-year decrease of 62 million yuan. In terms of net interest rate, net interest rate also increased by 0.52 pcts to 3.55 percent in 2023. The net operating cash flow in 2023 was 881 million yuan, and the inflow increased by 1,014 million yuan; of these, revenue decreased 2.65 pcts to 100.27%, and current payments decreased 7.63 pcts to 100.07% compared to the same period.
Relying on the leading position in the curtain wall industry, the photovoltaic construction business is expanding at an accelerated pace. The company's Jianghe Façade, Gangyuan Façade, Chengda Group, Gangyuan Decoration and other units have taken advantage of the waves and won a large number of key projects one after another.
As of 2023, the company's on-hand orders were about 33.4 billion yuan, an increase of 2.77%, laying a solid foundation for the continuous release of the company's subsequent performance, while also demonstrating the company's core competitiveness in the field of construction and construction. The company's photovoltaic business is gradually gaining momentum in the market, winning bids for a number of key BIPV projects represented by Xiamen Airport, Qingdao Telegraph Headquarters, Shenzhen Zhonghai Tower, and Zhuhai China Resources Bank headquarters. In 2023, the company undertook a total of about 1.37 billion yuan in photovoltaic construction projects (BIPV), an increase of 60.42% over the previous year. The company's photovoltaic construction projects achieved revenue of 704 million yuan throughout the year, an increase of 309.30% over the previous year.
Profit forecasting and ratings. The company has sufficient orders in hand, and the company's future performance is likely to improve. We expect the company's EPS to be 0.68 and 0.76 yuan respectively in 24-25. As an industry leader, the company will enjoy a certain leading effect, giving it a price-earnings ratio of 14-16 times in 24 years and a reasonable value range of 9.52-10.88 yuan, giving it a “superior to the market” rating.
Risk warning. Refund risk, business development risk, policy risk.