24Q1 net profit without return to mother was +93.77%, maintaining the “purchase” rating company 24Q1 to achieve revenue/net profit withholding net profit of 21/0.9/0.9 billion yuan, compared to -22.1%/+42.4%/+93.8% (described above). Net profit attributable to mother was basically in line with our expectations (70 million yuan). The year-on-year decline in revenue was due to business structure optimization. The increase in revenue from engineering general contracting with lower profit margins was due to increased cost control, depreciation and return. We maintain the company's 2024-2026 net profit forecast of RMB 18.6/19.8/2.06 billion, respectively. Comparatively, the company Wind agreed to expect PE to be 14x. Considering that the company is a leader in the industry, has a global layout, and has obvious advantages in scale and high-end, the company was given 16xPE in 24, with a target price of 14.45 yuan (previous value of 12.65 yuan), maintaining a “buy” rating.
24Q1 operations improved quality and efficiency, and net profit margin increased significantly year-on-year. 24Q1 company's comprehensive gross margin was 16.0%, +0.6pct year-on-year, mainly due to business restructuring.
The cost rate for the period was 10.75%, -0.29pct year on year, with sales/management/R&D/finance expenses ratio 2.20%/4.79%/5.65%/-1.89%, -0.60/-0.36/+1.26/ -0.58pct year on year. The effective pressure drop in sales and management expenses was -38.9%/-27.6% year over year, respectively. Maintaining R&D intensity led to an increase in the cost ratio. The impairment surged back 18.94 million yuan in 24Q1, and the impairment of 25.43 million yuan was calculated in 23Q1, mainly due to the company's enhanced collection of accounts receivable. Under the combined influence, the 24Q1 company's net interest rate was 4.30%, +1.95pct year on year, and 4.05% net interest rate after deducting non-return to mother was 4.05%, +2.42pct year on year.
Asset structure optimization, and mismatch of receipt and payment rhythms affected short-term cash flow 24Q1. The company's balance ratio at the end of 24Q1 was 52.0%, compared to -1.41 pct at the end of 23. Net operating cash flow of 24Q1 - 1.0 billion yuan, an increase of 800 million yuan over the previous year, mainly due to the characteristics of the industry. Repayments in the first quarter were low. On the other hand, the company did not simultaneously reduce settlement progress with suppliers in response to national calls. The Q1 payment/payout ratio was 105.0%/119.4%, respectively, -19.2/+16.7 pct. The final company's notes receivable and accounts receivables/contract assets/prepayable/notes payable and accounts payable/contract liabilities in 24Q1 were $80/10/9/65/1.7 billion, respectively, compared with +2.8/-0.8/+1.1/-5.4/-0.9 billion yuan at the end of 23.
The National Design Institute team, with endogenous and epitaxial two-wheel drive, lays out the low-altitude economy CCCC Design as a design platform under CCCC Group. Compared with other domestic listed design companies, the company has strong stability, obvious trends in scale and high-end, and has impressive operating data such as profit margin, cost ratio, and cash flow. In the future, the company will implement its development strategy through both endogenous and epitaxial paths. It is expected to target the growth path of AECOM, a leading overseas design company. As a national team in the design industry, the company actively lays out the low-altitude economy, designs and constructs a new type of infrastructure to serve the low-altitude economy for the country, provinces and cities, and is committed to becoming a well-known service provider for the design, construction and operation of the “Sky Road” of the low-altitude economy, providing a “CCCC Solution”.
Risk warning: Business integration risk after transaction completion, risk caused by macroeconomic cycle fluctuations, accounts receivable recovery risk.