occurrences

The company disclosed the 2024 semi-annual report. 24H1's revenue was 194.3 billion yuan, yoy +1.1%, net profit due to mother 2.8 billion yuan, yoy +4.7%, after deducting non-attributable net profit of 2.3 billion yuan, yoy -0.9%; single 24Q2 revenue of 96.9 billion yuan, yoy -6.5%, net profit due to mother 1.3 billion yuan, yoy -15.1%, net profit of non-return to mother 1.2 billion yuan, yoy -9.2%.

Construction growth is resilient, and new energy sources are growing rapidly

24H1 survey and design consulting/engineering construction/industrial manufacturing/investment and operation revenue was 78/165/14.6/13.1 billion, yoy +22.7%/+2.9%/-5.3%/-11.2%. Among them, revenue from new energy and integrated smart energy sources was 59.1 billion yuan, yoy +8.0%, accounting for 30.4% of the company's total revenue (vs 30.2% revenue in 2023); investment of 14.5 billion yuan, yoy +34.3%. The growth of engineering construction is resilient. New energy and integrated smart energy continue to grow rapidly, and investment intensity remains high. 24H1 domestic and foreign revenue was 166.1/28.1 billion yuan, yoy-0.3/ +10.3%, respectively.

Gross margin increased slightly, and profitability of new energy sources improved

24H1 gross profit margin 12.2%, yoy+1.3pct; single Q2 gross profit margin 13.7%, yoy+2.0pct. 24H1 survey and design consulting/engineering construction/industrial manufacturing/investment and operation gross margin was 36.6%/7.3%/17.2%/43.4%, yoy+0.3/+0.5/-1.6/ +14.4%. The gross margin of new energy and integrated smart energy increased slightly, with yoy+1.2/+2.6pct in the engineering category and investment and operation category respectively to 6.1%/46.1%. 24H1 cost ratio yoy+0.9pct to 8.2%, sales/management/R&D/finance expenses ratio yoy+0.1/+0.3/+0.4pct, respectively. 24H1 net profit margin was 1.4%, the same year on year; single Q2 was 1.3%, yoy-0.1pct.

First mid-year dividend. The dividend ratio is higher than previous years

The balance ratio at the end of 24H1 was 77.4%, yoy+1.6pct. The 24H1 two-gold turnover period is 286 days, yoy+38 days.

24H1 operating cash flow increased by 0.9 billion to a net outflow of 14.5 billion yuan, and investment cash flow increased by 15 billion yuan to a net outflow of 26.6 billion yuan over the same period last year. The company also announced a semi-annual profit distribution plan. Each A share will receive a cash dividend of 1.25 points (tax included), and plans to distribute 0.52 billion yuan. The dividend ratio is 19.93%, which is higher than the 2023 dividend ratio of 14.24%.

The prospects for rebuilding new energy are promising, maintaining a “buy” rating

We expect the company's net profit to be 8.9/9.8/11.1 billion yuan in 2024-2026, yoy +11%/12%, respectively.

Based on the company's “14th Five-Year Plan” goals by 2025, the indicators will double and create a new energy building with high-quality development. The prospects for “three new” energy construction centered on new energy, new infrastructure, and new industries are worth looking forward to. Maintain a “buy” rating.

Risk warning: weak implementation of the company's strategy, weak investment in electricity and infrastructure, risk of impairment, policy risk