The company announced its 2023 annual report. 23fy's revenue was 758.7 billion yuan, yoy +5%, net profit due to mother, yoy +24%, net profit of 21.7 billion yuan, yoy +58%; single 23q4 revenue was 211 billion, yoy +17%, net profit attributable to mother of 7.6 billion yuan, yoy +121%, net profit of non-return to mother, net profit of 6.4 billion yuan, yoy +434%. Performance growth exceeded expectations.
Rapid growth in overseas revenue
By business, 23fy infrastructure construction/infrastructure design/dredging revenue of 6,659/473/53.4 billion, yoy +5%/-6%/+5%. The infrastructure construction and dredging business grew steadily, and infrastructure design continued to be under pressure. In the subregion, 23fy's domestic and foreign revenue was 6425/116 billion, respectively, yoy +3%/18%, respectively. Overseas revenue grew rapidly.
At the end of 23fy, the company had orders of 3,450.7 billion dollars, which is 4.5 times the revenue for the same period. 23fy entered 31 franchise projects, with operating revenue of 7.7 billion yuan and net loss of 1.9 billion yuan (vs. 33 22fy operating period projects, revenue of 7.1 billion yuan, net loss of 2 billion yuan), a slight increase in revenue and marginal improvement in efficiency.
23q4 profit margin increased significantly
23fy gross profit margin 12.6%, yoy+0.9pct; single 23q4 gross profit margin 16.0%, yoy+2.8pct. 23fy infrastructure construction/infrastructure design/dredging gross margin was 12%/19%/13%, yoy+1.0/+2.0/ -0.2pct.
The increase in gross margin of infrastructure construction/design has benefited from increased contributions/business restructuring from overseas business and domestic cash transfer projects, respectively. 23fy cost ratio yoy+0.2pct to 6.3%, sales/management/R&D/finance expense ratio yoy+0.1/-0.2/+0.3/+0.0pct. The impact of impairment losses is reduced, and return on investment is reduced.
23fy net profit margin 3.1%, yoy+0.5pct; single 23q4 net profit margin 3.6%, yoy+1.7pct.
Significant improvement in operating cash flow
23fy's balance ratio is 72.7%, yoy+0.9pct; interest-bearing debt ratio is 42.5%, yoy+1.6pct. Futures turnover has slowed down. 23fy Futures has 185 days, yoy+12 days.
23fy's operating cash flow increased year-on-year to a net inflow of 10.9 billion dollars to a net inflow of 12.1 billion dollars, and net investment cash flow increased by 9 billion yuan to a net outflow of 55.9 billion yuan over the same period last year.
Infrastructure leaders continue to break through. Maintaining the “purchase” rating, the company's revenue is estimated to be 8,300/9,140/1,09.7 billion yuan, yoy +9%/10%/10%, respectively. The company's business restructuring and optimization profit margin effect is remarkable. The net profit for 24-26 is estimated to be 261/287/31.8 billion yuan, yoy +9%/10%/11%, EPS is 1.60/1.76/1.95 yuan/share, respectively, and the 3-year CAGR is 10.1%. The company is one of the leading infrastructure companies in China, and its overseas business may benefit from the “Belt and Road” order. Trillions of treasury bonds support the infrastructure boom, and the renovation of urban villages has unleashed an increase in domestic demand. Maintain the target price of 14.28 yuan, corresponding to PE 8.9x in 24 years, and maintain the “buy” rating.
Risk warning: Infrastructure investment is weaker than expected, and the pace of implementation and implementation of REITs supporting policies falls short of expectations