Main points of investment
Southeast net released the semi-annual report of 2023: the company's 2023H1 achieved a total operating income of 6.537 billion yuan, an increase of 8.03% over the same period last year; a net profit of 222 million yuan, a decrease of 25.34% over the same period last year; and a net profit of 210 million yuan, a decrease of 16.31%. Among them, Q2 achieved a total operating income of 3.348 billion yuan, an increase of 0.70% over the same period last year, a net profit of 80 million yuan, a decrease of 36.53% over the same period last year, and a net profit of 71 million yuan, down 19.10% from the same period last year.
The newly signed contracts for the company's 2023H1 steel structure business totaled 7.52 billion yuan, up 5.42 percent over the same period last year; sales of chemical fiber products totaled 231700 tons, up 20.93 percent over the same period last year; and total revenue was 6.537 billion yuan, up 8.03 percent over the same period last year. 1) from a quarterly point of view, the company's total operating income of 2023Q1 and Q2 reached 3.189 billion yuan and 3.348 billion yuan respectively, an increase of 16.97% and 0.70% respectively over the same period last year. 2) from the perspective of sub-business, revenue from general contracting, steel structure subcontracting, chemical fiber and other businesses reached 1.284 billion yuan, 3.56 billion yuan, 1.546 billion yuan and 118 million yuan respectively, with year-on-year changes of-24.63%, + 23.47%, + 13.04% and + 22.11%, respectively. Among them, the steel structure subcontract business grew rapidly, mainly due to the company's twin-engine development strategy around "EPC general contracting + Project 1". Build prefabricated steel structure hospitals, schools and other characteristic brands The photovoltaic business was separately listed in the mid-2023 report, with an income of 29 million yuan, achieving an initial volume, and the company continued to expand the photovoltaic building integration market with the construction mode of "assembly + EPC+BIPV".
The company's 2023H1 achieved a comprehensive gross profit margin of 10.94%, down 1.54 pct from the same period last year, and a net profit margin of 3.42%, down 1.51pct from the same period last year. The decline of gross profit margin of general contracting and chemical fiber business is the main reason for the decline of comprehensive gross profit margin of the company. From a sub-business point of view, the gross profit margins of project general contracting, steel structure subcontracting and chemical fiber business were 11.06%, 14.04% and 2.07% respectively, down 3.06pct, 0.90pct and 2.27pct respectively compared with the same period last year.
The company's expenses during the 2023H1 period totaled 433 million yuan, accounting for 6.63% of the revenue end, an increase of 0.08pct over the same period last year.
The asset + credit impairment loss was 14 million yuan, accounting for 0.22% of the income end, a decrease in 0.58pct compared with the same period last year.
The net cash flow generated by the company's 2023H1 operating activities was-575 million yuan, an increase of 180 million yuan over the same period last year.
From the perspective of income-to-cash ratio, the company's 2023H1 income-to-cash ratio was 82.0% and 93.7% respectively, down 1.1pct and 8.9pct respectively from the same period last year.
Earnings forecast and rating: we adjust the profit forecast for the company. It is estimated that the EPS of the company from 2023 to 2025 is 0.30,0.33,0.37 yuan respectively, and the corresponding PE of the closing price on August 30 is 20.3x, 18.1x, 16.4x respectively, maintaining the "overweight" rating.
Risk tips: macroeconomic downside risks, lower-than-expected landing of on-hand orders, slow progress of construction projects, deterioration of cash flow, and loss of bad debts exceeding expectations.