Incident: The company announced that in 2024Q1, it achieved revenue of 274.949 billion yuan, an increase of 0.52%; net profit of 6.025 billion yuan, an increase of 1.98%; and realized net profit without deduction of 5.777 billion yuan, an increase of 1.99%.

Green and environmental protection business orders are growing rapidly, and the pace of new land reserves is accelerating. The total number of new contracts signed by the company in 2024Q1 was 55.69 billion yuan, an increase of 2.05%. By business, the company's business orders related to green environmental protection and emerging industries are growing rapidly. Specifically, the company's 2024Q1 engineering contracting/investment and operation/green environment/planning and design consulting/industrial manufacturing/real estate development/material logistics/industrial finance/emerging industries achieved new contract amounts of 4101.12/463.65/276.80/57.82/68.93/137.16/340.42/22.65/38.36 billion yuan, with year-on-year changes of 3.12%/6.65%/36.70%/-32.31%/5.05%/-31.85%/-12.83%/ 4.55%/116.55% Real estate development business sales declined year on year, and the pace of new land reserves increased. Specifically, 2024Q1 achieved a sales contract of 13.458 billion yuan, a decrease of 32.17%; the total construction area of the additional equity plan of 1.3941 million **** meters increased by 146.83%. By region, the company's overseas business orders grew rapidly. 2024Q1 achieved new contract amounts of 516.7.44/33.946 billion yuan domestic/overseas respectively, an increase of 1.46%/11.85% respectively.

Profitability remained flat year over year, and cash flow was under pressure. The company achieved a gross profit margin of 7.79% and an increase of 0.02pct in 2024Q1; the period expense ratio of 4.23% increased by 0.09pct, of which the company's sales/management and R&D/finance expenses ratio was 0.56%/3.16%/0.51%, -0.03pct/0.1pct year over year; asset and credit impairment loss rate 0.17% decreased by 0.05pct; and the net vested profit margin 2.19% increased by 0.03pct. The company's net cash flow from operating activities in 2024Q1 was 46.594 billion yuan, an increase of 7.378 billion yuan over the same period of the previous year; the revenue ratio decreased by 1.24 pct by 104.75%; and the current payment ratio increased 1.29 pct. As of 2024Q1, the size of the company's accounts receivable and notes, inventory+contract assets, accounts payable and notes, accounts receivable plus contract liabilities was 1807, respectively.

8/6216.4/5287.7/146.82 billion yuan, a year-on-year change of 13.67%/3.71%/-2.98%/-2.40% compared with the beginning of the year.

Investment advice: We expect the company to achieve net profit of 268.74/286.19/30.445 billion yuan in 2024-2026, an increase of 2.98%/6.49%/6.38%, EPS of 1.79/1.92/2.05 yuan respectively, and corresponding PE 4.84/4.52/4.22 times, respectively, maintaining the “increase” rating.

Risk warning: Steady growth falls short of expectations; risk of large macroeconomic fluctuations; slow order execution.