We maintain "Buy" and TP at HK$3.88. We maintain our forecast on Horizon Construction Development's (the "Company") shareholders' net profit in 2023-2025 to RMB931 mn / RMB1,158 mn / RMB1,336 mn, respectively. We maintain our forecasted earnings per share in 2023-2025 at RMB0.291, RMB0.362, and RMB0.418, respectively. Our TP represents 12.0x/ 9.7x/ 8.4x 2023-2025 PE ratio and 1.3x 2023 PB ratio. We believe the Company's fundamentals remain solid, and we are optimistic about the Company's revenue growth.

The Company's stock price fell sharply due to the distribution of special dividend by Far East Horizon (03360.HK). As the Company's major shareholder, Far East Horizon (03360.HK) announced to distribute no more than 159,819,846 shares of the Company as special dividend to its shareholders in December 2023. The special dividend was available for trading on 17 January 2024 and caused a liquidity impact on the Company's stock price. In the short term, the Company's stock price was under pressure by the sell-off, but we believe this sell-off would not last for a long time. In the long term, we believe that the distribution of a special dividend by Far East Horizon could increase the liquidity of the Company's stock. The Company's investment value is further highlighted after the stock price dropped.

The Company's fundamentals remain solid. The Company's equipment scale further grew. As at the end of 30 September 2023, the Company has further expanded the size of its equipment fleet of aerial work platforms, with the total number reaching approximately 175,000 units. The volumes of neo-excavation support systems and neo-formwork systems were approximately 1.53 million tons and approximately 650,000 tons, respectively, as at the end of 30 September 2023. We believe the market demand for aerial work platforms is strong, and the increase of the size of aerial work platforms is the main driver of the Company's business development.

The platform business may maintain a rapid growth. The Company actively explored the asset-light operation model, which improved the efficiency of resource allocation in the industry, and fully met the downstream needs of customers. Although the proportion of revenue from platform and other services was relatively low, we believe that the Company's advantages in operations will enable the platform services to continue to grow rapidly. The Company will continue to balance its proportion of self-owned assets and the operation of third-party assets to achieve better development.

We are optimistic about the Company's performance in 2024. We believe that the effect of China's macroeconomic policies is gradually emerging. The Company's revenue will continue to grow in 2024.