The full-year performance was under pressure in the short term, and the two-wing layout continued to empower the main business, maintaining the “buy” rating, and achieved operating income and net profit of 36.6 billion yuan and 1.36 billion yuan, respectively, a year-on-year decrease of 22.9% and 15.3%; gross sales margin and net margin were 50.8% and 41.8%, respectively, a year-on-year decrease of 6.8 and 4.2 percentage points, respectively. It is proposed to pay a cash dividend of 2.7 yuan (tax included) for every 10 shares, for a total of 410 million yuan, with a dividend ratio of 30.05%. Based on the closing price on the announcement date, the dividend rate is approximately 3.3%. Considering that park development is affected by the downturn in the market, 2024-2025 and the 2026 profit forecast is added, the net profit for 2024-2026 is estimated to be 14.3, 15.5, and 1.68 billion yuan (the original value of 2024 and 2025 was 19.9 billion yuan and 2.18 billion yuan), EPS was 0.96, 1.03, and 1.12 yuan respectively. The current stock price corresponding to PE valuations is 8.7, 8.0, and 7.4 times, respectively. The company's “integrated two wings” business is expected to continue to increase performance and maintain “buy” “Enter” rating.

Park operations have improved quality and efficiency, and land sales have fallen short of expectations

Park development and operation is the core business. By the end of 2023, the park's operation had improved quality and efficiency. By the end of 2023, the heavily cultivated Suzhou Industrial Park had a self-operated carrier area of 2.03 million square meters, with more than 460 resident enterprises, including 20 of the world's top 500 enterprises and 78 high-tech enterprises, with a comprehensive occupancy rate of 93%. Among the various carriers, 1.22 million square meters of plant carriers and a comprehensive occupancy rate of more than 95%, the rest of the industrial parks had also achieved a high level of development. However, due to the reduction in the park's floor area, business revenue was under pressure in the short term, and ultimately achieved revenue of 2.85 billion yuan, a decrease of 26.3% over the previous year.

Industrial investment is growing efficiently, and new energy development can be expected in the future

The multi-level layout of industrial investment achieved a total of 680 million yuan in net profit and loss of investment income plus fair value changes throughout the year, an increase of 31.6% over the previous year. It also continues to empower its main business. Among them, in terms of fund investment, a total of 47 external market-based funds have been pledged to invest, driving the total investment scale of various park projects to nearly 60.5 billion yuan. In terms of direct investment in science and innovation, a total of 36 technology projects have been directly invested, driving a total investment of 5.86 billion yuan; in terms of green development, a total of 474 MW has been connected to the grid, and the scale of construction is 211 MW. The park's operational advantages also provide broad development space for the business.

Operating cash flow improved significantly. The increase in expenses during the period dragged down performance, benefiting from increased development business payments. The company's net operating cash flow in 2023 was 1.76 billion yuan, an increase of 51.5% over the previous year. In terms of expenses, the total expenses for the whole year amounted to 500 million yuan, an increase of 10.2% over the previous year.

Among them, R&D, sales, management, and financial expenses increased by 46.0%, 21.4%, 10.9%, and 5.7%, respectively.

Risk warning: Increased market competition, industrial investment risks, and new energy business expansion falling short of expectations.