24H1 revenue/net profit to mother was -26.3%/-15.5% YoY, maintaining the “Buy” rating company 24H1, achieving revenue of 0.52 billion yuan, -26.3% YoY, and net profit to mother of 59.23 million yuan, or -15.5% YoY. 24Q2 achieved revenue of 0.291 billion yuan, or -35.03% year on year, net profit to mother of 56.13 million yuan, -14.90% year over year, lower than our expectations (0.062 billion yuan), mainly due to slow recovery in demand and a decline in revenue exceeding expectations. We maintain the 24-26 net profit forecast of 0.189/0.217/0.245 billion yuan. Comparatively, the company's 24-year Wind unanimously expected an average of 10xPE. The company gradually escapes the influence of real estate. In the future, as a leading housing construction design leader with rich project design experience, leading BIM development, and sufficient accumulation of data assets, it is expected to take the lead in benefiting from AI, giving the company 14xPE in 24 years, with a target price of 13.48 yuan (previous value: 14.44 yuan), maintaining a “buy” rating.

The overall gross margin of 24H1 improved, and the prefabricated design business reflected the gross profit margin of Resilient 24H1 Company of 27.75%, +0.55pct year over year. The main reason was that general contracting revenue for projects with low gross margin was -88.2% to 0.009 billion yuan compared to the same period, which decreased by 9.52 pct to 1.81%. Architectural design achieved revenue of 0.437 billion yuan, -19.9% year over year, with a gross profit margin of 30.7%, -0.65pct year on year, of which prefabricated building design revenue was 0.25 billion yuan, +1.68% year over year; cost consulting business revenue was 0.052 billion yuan, -18.0% year on year, accounting for an increase of 1.02 pct to 10.1%, gross profit margin of 18.7%, -2.89 pct year on year.

The depreciation rush led to an improvement in 24H1 net interest rate. The 24Q2 cash flow improved year-on-year. The 24H1 company's expense ratio was 18.44%, +2.18pct year over year. Among them, the sales/management/R&D/finance expenses ratio was +0.29/+2.85/-0.15/-0.81 pct year on year. The management expense ratio increased a lot, mainly due to the fact that expenses remained basically flat year over year and revenue declined a lot. The net return of 24H1 depreciation was 17.98 million yuan. The net return for the same period last year was 10.65 million yuan. Under the combined influence, 24H1 net profit margin was +1.46pct year-on-year to 11.40%.

24H1 company's net operating cash -0.125 billion yuan, with a year-on-year increase of 0.115 billion yuan, payout ratio of 93.0%/26.9%, year-on-year -6.55/+13.17pct, of which 24Q2 net operating cash flow was -0.03 billion yuan, with a year-on-year decrease of 0.063 billion yuan, with a payment/payout ratio of 84.0%/20.0%, +4.48/-20.14pct, a pioneer in BIM development and steadfastly promoting “design+technology” strategy

The digital transformation of the construction industry is trending. At the beginning of '22, the Ministry of Housing and Construction issued the “14th Five-Year Plan” construction development plan, clarifying that the BIM technical framework and standard system will basically be formed in 25 years. The company has firmly promoted the “design+technology” strategy. Since starting BIM research in 2008, it has participated in the formulation of 17 relevant standards in China and Shenzhen, developed and launched the iBIM platform V6.04 and Huayang Express Construction, and cooperated with Zhongwang Software (688083 CH) to create BIM software with completely independent intellectual property rights, from the underlying geometric modeling engine to the development of various professional functions at the application layer to completely solve the bottlenecks of independent control and software performance of domestic software. Currently, the company continues to promote digital transformation based on BIM technology, accelerate the development and iteration of artificial intelligence technology, expand the application scenarios of AI design, and accelerate the integration of AI technology with the entire design process. Risk warning: investment in municipal infrastructure or real estate has slowed drastically, and the improvement in human efficiency is slower than expected.