Incidents:
The company released its 2023 annual report. In 2023, we achieved operating income of 3.388 billion yuan, an increase of 21.09% over the previous year, net profit of 488 million yuan, an increase of 10.26% over the previous year, and net profit after deducting non-return to mother of 526 million yuan, an increase of 22.04% over the previous year. Among them, 2023Q4 achieved revenue of 1,352 billion yuan, a year-on-year increase of 24.99%, net profit of 114 million yuan, a year-on-year increase of 5.05%, and net profit after deducting non-return to mother of 150 million yuan, an increase of 43.12% over the previous year.
Operations have grown steadily, and profits have gradually increased. On the revenue side, during the reporting period, the company's three main businesses all achieved rapid growth. By business, survey and design/engineering management/general engineering contracting achieved revenue of 20.81/1.47/1,148 billion yuan, an increase of 16.54%/10.06%/31.29%. Judging from the new contracts signed during the reporting period, the company signed a total of 4.582 billion yuan, an increase of 13.80%. Among them, survey and design/engineering management/general engineering contracting signed new contracts of 22.68/2.25/20.89, respectively, up 0.32%/8.91% year on year /34.21%. The company actively develops integrated businesses, further expands the design-centered “engineering investment+consulting+planning+design+construction” business chain, making every effort to explore the market, and is deeply involved in the fields of municipal administration and highway engineering construction. The three major businesses are collaboratively developing and growing together. On the profit side, gross margin increased 2.07 pct to 33.85% year over year during the reporting period. Among them, survey/design/engineering management/general engineering contracting was +4.89pct/+0.09/-0.86pct to 46.84%/18.74%/12.04% year on year. The cost ratio remained relatively stable during the period, increasing by about 1.09pct to 13.56% year on year. The gross margin increased significantly until the company's performance outperformed the revenue side.
The low-altitude economy has broad prospects, and the company has great potential. The company continues to deeply cultivate the civil aviation business consulting services and survey and design market, and carries out various tasks such as project site selection and research as required. During the reporting period, the company obtained various projects such as consulting services for site selection at Shucheng General Airport, and signed a new contract amount of 34 million yuan. As one of the country's three pilot provinces for global low-altitude airspace management reform, Anhui has successively introduced the “14th Five-Year Plan” for the development of the civil aviation industry, medium- and long-term development plans for the general aviation industry, etc. In 2023, Anhui attracted a total of 59 aerospace manufacturing projects, with a total investment of 82.6 billion yuan. The scale of the low-altitude economy exceeded 40 billion yuan. We are optimistic about the company's development prospects in the low-altitude economy.
Profit forecast: Based on Anhui Province's active cultivation of the low-altitude economy industry, the company will provide technical support to the government in the field of low-altitude economy, so we are optimistic about the company's development and development in this field. We expect the company to achieve net profit of 509/552/602 million yuan in 2024-2026, corresponding PE of 13/12/11 times. The 2024 profit was estimated at 15 times PE, and the target price was 13.6 yuan. It was covered for the first time, and a “buy” rating was given.
Risk warning: Downstream demand falls short of expectations, profit forecasts and valuation judgments fall short of expectations.