深耕软土地基处理业务，技术领先奠定头部地位，“出海”战略排头兵。公司掌握“高真空击密法”技术，相较于传统技术更加节约工期、节省造价，处理后的软土地基承载力较强具备综合优势。公司始终秉持国际化发展战略，瞄准重视岩土工程解决方案的盈利市场，持续深耕东南亚地区，以及“一带一路”沿线重点国家和中东国家市场潜力，海外市场的品牌影响力和市场份额不断扩大，是我国软土地基处理板块出海的“战略排头兵”。Key points of investment:
Company announcement: Shanghai Port released its 2024 three-quarter report. In the first three quarters, the company achieved operating income of 0.94 billion yuan (yoy +4.8%), net profit due to mother 0.11 billion yuan (yoy -24.5%), and net profit of 0.1 billion yuan (yoy -23.8%) after deducting non-return to mother net profit of 0.1 billion yuan (yoy -23.8%). In the third quarter of a single quarter, the company achieved revenue of 0.31 billion yuan (yoy -6.3%, qoq -8.5%), net profit to mother 0.035 billion yuan (yoy -7.9%, qoq -19.8%), and net profit of 0.036 billion yuan (yoy -2.8%, qoq -8.5%) after deducting net profit from non-mother, and the company's performance was in line with expectations.
Gross margin increased slightly year-on-year, R&D and financial expenses increased a lot, and net interest rate declined in the single quarter. The company's gross profit margin for the first three quarters was 34.5% (yoy+1.3pct), and the net profit margin was 11.4% (yoy-4.6pct). The sales/management/R&D/finance expense rates for the first three quarters were 0.7%/16.9%/2.9%/-0.4%, respectively, -0.2pct/+3.8pct/+1.4pct/+0.2pct, respectively. The company's gross profit margin for the third quarter was 30.6% (yoy+1.0pct, qoq-5.1pct), and the net profit margin was 11.1% (yoy-0.3pct, qoq-1.6pct). Sales/ management/ R&D/ finance cost rates for the third quarter were 0.7%/16.1%/2.9%/0.7%, respectively, -0.5pct/+0.8pct/+1.9pct, +0.1pct/-0.2pct/+1.9pct month-on-month, and the total cost rates for the four categories were +4.2pct, and +1.5pct month-on-month. On a year-on-year basis, the company's financial expenses rate and R&D expense ratio increased a lot in the third quarter. The company continued to actively deploy R&D directions in emerging industries in the third quarter, focusing on innovation and leadership, increasing R&D investment; increased financial expenses or exchange gains and losses due to changes in the RMB exchange rate.
Deeply involved in the soft soil foundation treatment business, established a leading position with leading technology, and pioneered the “going overseas” strategy. The company has mastered the “high vacuum compaction method” technology. Compared with traditional technology, it saves construction time and costs, and the soft soil foundation after treatment has strong bearing capacity and comprehensive advantages. The company has always adhered to an international development strategy, aimed at a profitable market focusing on geotechnical solutions, and continued to deeply cultivate the market potential of Southeast Asia, key countries along the “Belt and Road” and Middle Eastern countries. The brand influence and market share in overseas markets continued to expand, and it is the “strategic vanguard” of China's soft soil foundation treatment sector going overseas.
New orders grew rapidly in the first half of the year, laying the foundation for performance growth. 2024H1 has signed new orders of 1.19 billion yuan (yoy +78.2%), which exceeds the total amount of new orders signed in 2023. Looking at the subregion, the growth rate of domestic orders is relatively good, with significant overseas growth: 0.25 billion yuan (yoy +40.9%) for new domestic orders and 0.94 billion yuan (yoy +92.0%) for new overseas orders in the first half of the year. Looking at further spin-offs, the Southeast Asia/Middle East region added 7.8/0.14 billion yuan, accounting for 83.7%/15.4% of new overseas signings. Indonesia, Saudi Arabia, the United Arab Emirates, Singapore, and Thailand are the main sources of new orders. Guided by the rapid increase in contract orders, we expect the company's revenue to maintain strong growth in the future.
Investment analysis: The company's performance is in line with expectations, and we maintain our profit forecast for 2024-2026. Revenue is expected to be 1.56, 2.02, and 2.46 billion yuan respectively in 2024-2026, up 21.8%, 29.9%, and 21.8% year-on-year; net profit to mother will be 0.205, 0.324, and 0.401 billion yuan, respectively, up 17.9%, 58.0%, and 23.6% year-on-year respectively. The price-earnings ratio per share corresponding to the current closing price is 23, 14, and 12 times, respectively, maintaining the company's “increase in wealth” rating.
Risk warning: Fluctuations in overseas demand, uncertainty in the conversion of on-hand orders, risk of exchange rate fluctuations.
