Incident: The company announced that it had achieved revenue of 16.506 billion yuan, an increase of 5.04%; achieved net profit of 548 million yuan, a decrease of 21.59%; and realized net profit without deduction of 488 million yuan and a decrease of 27.02%.

Revenue is rising steadily, and weak industry demand is dragging down performance growth. On a quarterly basis, the company's Q1-Q4 revenue was 37.21/40.03/38.30/4.953 billion yuan, respectively, with year-on-year changes of 0.23%/11.68%/0.44%/7.54%; net profit to mother was 1.80/2.11/1.45/ 0.13 billion yuan, respectively, with changes of 0.71%/4.99%/-46.80%/-73.39% year-on-year, mainly due to factors such as downstream industrial capacity migration and the slowdown in public construction investment affecting steel structure demand With the release, competition among superimposed steel structure companies intensified, and profit margins in the industrial chain declined. By business, the company's steel structure industry/integration and EPC/other business revenue in 2023 was 143.05/17.88/ 206 million yuan respectively, +13.26%/-34.96%/+22.18%; in 2023, steel structure sales of 1.22 million tons increased 8.93%, and the year-on-year growth rate of Q1-Q4 sales was 15.7%/11.7%/8.6%/2.6%, respectively. The quarterly slowdown was mainly affected by weak structural demand.

The BIPV business continues to advance and actively explore the market overseas. In 2023, the total amount of new contracts signed by the company was 20.7 billion yuan, up 8.0% year on year; of these, Q1/Q2/Q3/Q4 new order amounts were 55.0/56.9/49.2/4.16 billion yuan, respectively, +23.4%/+47.2%/-22.0%/0.4% year-on-year. By business, in 2023, professional subcontracting/industrial construction/public building/emerging business/EPC and prefabricated/industrial chain and strategic franchise/other order amounts were +4.8%/-12.2%/+24.7%/+16.2%/+60.6%/-8.0%, respectively. The BIPV business contract amount was 150 million yuan, a significant increase over previous years. By region, the company continued to strengthen overseas expansion in 2023. By the end of the year, it had established 9 branches overseas and established business dealings with nearly 30 countries (regions). New overseas industrial construction orders were signed throughout the year, an increase of 188.8% over the previous year, accounting for 7.2% of total annual industrial construction orders and 83.3% of total overseas orders. The company is actively exploring overseas, and the rapid growth in overseas orders may be expected to hedge against domestic industry development pressure.

Investment advice: We expect the company to achieve operating income of 179.15/199.11/22.224 billion yuan and net profit to mother of 578/6.42/770 million yuan in 2024-2026. The closing price on April 18 was 9.8/8.8/7.4 times PE, respectively, maintaining the “gain” rating.

Risk warning: risk of macroeconomic fluctuations; risk of increased industry competition; risk of fluctuations in raw materials.