Incident: In 2023, the company achieved operating income of 2,694 billion yuan, a year-on-year increase of 14.30%; net profit to mother of 78 million yuan, a year-on-year decrease of 69.36%; net profit after deduction of 54 million yuan, a year-on-year decrease of 76.34%.
The company's revenue for the first quarter of 2024 was 497 million yuan, a decrease of 14.42%; net profit to mother was 51 million yuan, a decrease of 46.46%; net profit not attributable to mother was 47 million yuan, a decrease of 48.83%. The reviews are as follows:
Electricity equipment supply revenue is growing rapidly, and the outside of the province is expanding rapidly. By industry, the company's power engineering construction, power equipment supply, and power consulting and design achieved revenue of 1,504, 10.49, and 141 million yuan respectively, up -2.83%, 58.59%, and -3.58% respectively. By region, the province and outside the province achieved revenue of 1,888 million yuan and 836 million yuan respectively, an increase of 8.61% and 29.36%, respectively. On a quarterly basis, the company's 2023Q1, Q2, Q3, and Q4 revenue increased 42.79%, 31.44%, 7.03%, and -3.82%, respectively. Net profit to mother increased 127.64%, -35.47%, -33.41%, and -345.69%, respectively. Net profit after deducting net income to mother increased 160.94%, -54.23%, -42.24%, and -437.08%, respectively; net interest rates for the single quarter were 16.58%, 6.71%, 10.15%, and -15.28%, respectively.
Gross margin declined, net profit margin declined, depreciation increased, and net operating cash outflow decreased. In terms of gross margin, gross margin decreased by 7.31 pcts to 19.36% in 2023. Among them, gross margins for power engineering construction, intelligent electricity services, and power equipment supply decreased by 9.99 and 0.09 pcts, respectively. In terms of the period cost ratio, the cost rate for the 2023 period was reduced by 0.62 pcts to 10.20%, of which the sales expense ratio was reduced by 0.28 pcts to 2.18%; the management expense ratio (including R&D expenses) was reduced by 0.34 pcts to 7.93%; the financial cost ratio remained basically unchanged. The total impairment of asset+credit was 183 million yuan, an increase of 89 million yuan over the previous year. In terms of net interest rate, net interest rate decreased by 7.87 pcts to 2.95% in 2023. The net operating cash outflow in 2023 was 98 million yuan, and the outflow decreased by 121 million yuan; of these, revenue increased 16.61 pcts to 86.43% compared to the same period, and cash payments increased by 18.10 pcts to 98.20% compared to the same period. In 2024Q1, gross margin decreased by 11.57 pcts to 17.37%, and the cost ratio increased by 0.65 pcts to 10.56% during the period. In addition, asset impairment and credit impairment totaled back $0.27 billion, an increase of 0.28 million yuan over the previous year; overall, net interest rate decreased by 6.29 pcts to 10.29%; net operating cash flow outflow was 77 million yuan, and outflow decreased by 183 million yuan.
Participate in more new energy projects and actively develop business outside the province. In 2024, the company will focus its work in the following directions: (1) Adhere to steady operations and maintain a healthy financial situation. The company will continue to strengthen cash flow management, recover accounts receivable in a timely manner, strictly control project risks, and improve the company's overall profit level. (2) Actively explore new power systems, participate in more new energy projects, and improve the company's technical capabilities in photovoltaics and energy storage. (3) Consolidate the Jiangsu market, further increase market share, accelerate market development in the Shanghai market, Beijing market, and the southwest region, actively develop business outside the province, and increase the share of business outside the province. (4) Actively expand key customers and further increase power services other than power supply and distribution among customers. (5) Attach great importance to the company's equipment business, attach importance to product development and technological innovation, and actively explore new businesses such as low-voltage components; cooperate with universities to accelerate the R&D and commissioning of PCS. (6) Continuously optimize the organizational structure and continuously improve the management level.
Profit forecasting and ratings. Power grid investment space is large, and the degree of marketization is deepening. As a one-stop service provider for electric power EPCO, the company's entire industry chain model has obvious advantages. We expect the company's 24-25 EPS to be 0.83 and 1.09 yuan, respectively, with a 24-year price-earnings ratio of 30-32 times, and a reasonable value range of 24.90-26.56 yuan, maintaining a “superior to market” rating.
Risk warning. Refund risk, business development risk, policy risk.