Description of the event
The company achieved operating income of 901 million yuan in the first three quarters, an increase of 51.97%; imputed net profit of 144 million yuan, an increase of 4.46% over the previous year; and net profit attributable after deduction of 137 million yuan, an increase of 3.31% over the previous year. The company achieved operating income of 335 million yuan in the single third quarter, an increase of 83.38% over the previous year; imputed net profit of 38 million yuan, an increase of 50.30% over the previous year; and net profit attributable after deduction of 37 million yuan, an increase of 65.75% over the previous year.
Incident comments
Revenue rose sharply in the first three quarters, and revenue grew explosively in the third quarter alone. In the first three quarters, the company achieved a 51.97% year-on-year increase in revenue, and an 83.38% year-on-year increase in revenue for the third quarter alone.
Gross margin declined, and expense ratios improved. The company's gross margin declined in the first three quarters. The consolidated gross margin was 33.2%, down 8.9pct year on year. Among them, the gross profit margin for the third quarter was 29.6%, down 2.8pct year on year. In terms of cost ratio, the company's expense ratio declined as a whole. The cost rate for the first three quarters was 15.0%, down 1.4pct year on year. Among them, sales, management, R&D, and financial expense rates changed year-on-year by -0.37, -2.4, -0.5, and 1.8 pct, respectively. Expense rates for the single third quarter were 16.2%, down 2.2 pct year on year, and sales, management, R&D, and finance cost rates changed -1.0, -1.7, -0.8, and 1.3 pct, respectively. Among them, year-on-year changes in financial expenses may be related to the company's exchange profit and loss.
Net interest rates declined, and the decline narrowed in the third quarter alone. Overall, the company achieved a decline in imputed net interest rates and deducted non-net interest rates in the first three quarters, and the decline declined in the third quarter alone. Among them, net interest rate attributable to the first three quarters fell 7.3 pct, minus non-net interest rate fell 7.2 pct; net interest rate fell 2.5 pct in the third quarter alone, minus non-net interest rate fell 1.2 pct. Among them: ① Non-recurring profit and loss for the third quarter was basically the same year on year compared to the first half of the year, with a decrease of about 1.77 million yuan, mainly due to changes in the company's fair value such as hedging, derivatives, and transactional financial assets; ② Credit impairment in the first three quarters decreased by about 4.54 million yuan year on year.
The company's operating cash flow rose slightly in the third quarter alone. The operating cash flow for the first three quarters decreased year on year, and the revenue ratio fell sharply.
The company's revenue for the first three quarters was 95.0%, a year-on-year decrease of 20.6 pct; net cash flow from operating activities was 140 million yuan, a year-on-year decrease of 0.2 billion yuan; net cash flow from operating activities in the third quarter was 0.8 billion yuan, compared with 0.2 billion yuan for the same period last year. Meanwhile, the company's receivables turnover in the first three quarters dropped sharply by 55.4 to 101.2 days. The current balance ratio of the company was 19.2%, up 4.1% year on year.
The repurchase+equity incentive shows confidence and continues to focus on growth opportunities in the Saudi+Indonesian market under the Belt and Road. The employee stock ownership plan completed the repurchase of 2.19 million shares in April, accounting for 1.27% of the total share capital and an average price of 30.74 yuan. At the same time, the assessment target sets a lower limit for performance growth. Net profit from 2023-2025 will not be less than 21/26/ 3.1 billion yuan, +32%/26%/17% over the same period last year. ① A rough estimate is that in Saudi Vision 2030, the geotechnical business could reach $15 billion. ② Indonesian market, related research by Indonesia's Bandung Institute of Technology, 1/4 of Indonesia's capital will sink into the sea in 2050. The Indonesian Parliament re-approves the capital relocation bill in 2022, which will give an important impetus to the medium- to long-term development of the construction industry. In August of this year, Jakarta, the capital of Indonesia, became the city with the worst air pollution in the world. The president moved the capital again, and construction of related projects is expected to accelerate. The company is deeply involved in overseas markets, especially in Southeast Asia. The Indonesian subsidiary is the largest source of revenue for Shanghai Port in Southeast Asia. The company is expected to make progress in two major projects with the pioneering rapid “high vacuum tightening” soft foundation treatment method.
Risk warning
1. The technological lead fell short of expectations, and the “high vacuum” series of patented technology competition barriers were broken; 2. New orders for Saudi landmark projects fell short of expectations.