24Q1 revenue/net profit ratio of -4.6%/-9.8%, maintaining the “purchase” rating, Dongfang Yuhong released a quarterly report, achieving revenue of 7.149 billion yuan (yoy -4.61%, qoq -4.19%) in the first quarter of 2024, net profit to mother of 348 million yuan (yoy -9.81%, qoq+428 million yuan), deducting non-net profit of 310 million yuan (yoy -4.39%, qoq+ 641 million yuan), or mainly due to the late Spring Festival in 2024, and post-Spring Festival projects The pace at which the project resumed work was slow. However, considering the recent improvement in physical construction volume, we maintain the company's 2024-2026 EPS forecast of 1.01/1.13/1.27 yuan, respectively. Comparatively, the company Wind agreed to expect an average PE value of 14.6 times. Considering the company's rapid transformation, the retail business maintained a high growth rate and continued to increase in share. The company was given 16 times PE in 24 years, maintained a target price of 16.12 yuan, and maintained a “buy” rating.
Comprehensive gross margin increased month-on-month, and raw material prices were relatively steady year-on-month. 24Q1 The company's comprehensive gross profit margin was 29.68%, +1.02pct year over year, +6.67% month-on-month, or mainly a year-on-month decline in the average price of the main raw materials of 24Q1 asphalt. Combined with 23Q4 batch settlement of engineering projects with low profitability, the effect of dragging down comprehensive gross margin was weakened from 24Q1. The average price of asphalt in 24Q1 was 3,842 yuan/ton, -3.27% YoY/-1.99% YoY. From the second quarter to mid-early April, the average price of asphalt was 3,857 yuan/ton, which did not change much from the average price in the first quarter. According to Wind, among other raw materials for emerging businesses, the 24Q1 average price of raw materials such as titanium dioxide/ ethylene oxide/PVC/PPR was +7.01%/-8.02%/-0.25%, and -0.81%/+0.54% month-on-month, and remained stable.
The year-on-year decline in revenue scale weakened, and the cash flow continued to improve the 24Q1 period by 20.39%, compared to +1.07pct. Among them, the sales/management/R&D/finance ratio was 10.53%/7.67%/1.76%/0.43%, +0.5pct/+0.32pct/-0.01pct. The sales/management/R&D expense ratio increased or the main revenue dilution effect weakened. Net profit margin for 24Q1 was 4.86%, -0.28pct/month-on-month +5.94pct. At the end of 23, the company's balance ratio/interest-bearing debt ratio was 40.3%/11.9%, -1.5pct/-1.1pct year-on-year. Net operating cash flow of 24Q1 -1,889 billion yuan, year-on-year +1.917 billion yuan. Cash flow continued to improve. Among them, the cash-on-cash ratio was 102.9%/135.4%, and the year-on-year -6.8pct/month-on-month -8.6pct.
The retail business developed rapidly, with double-digit revenue growth in 24 years. The company's retail business achieved revenue of 9.287 billion yuan, an increase of 28.11% over the previous year, accounting for 28.29% of the company's revenue, and the share of retail business gradually increased. Among them, the Civil Construction Group focuses on the dual main business development strategy of waterproof and moisture-proof systems. In '23, the Civil Construction Group achieved operating income of 8.18 billion yuan, an increase of 34.58% over the previous year; in '23, it plans to pay a dividend of 0.6 yuan per share. We estimate that the dividend rate is about 67%, and the dividend rate is about 4.3%. According to the resolution and announcement of the company's board of directors, the company's revenue budget for 2024 was 36 billion yuan, revenue competition increased by double digits, and the net profit budget was 3.6 billion yuan.
Risk warning: the decline in real estate and infrastructure investment has caused demand to fall short of expectations; raw material prices have risen sharply.