24Q1 revenue/net profit to mother was -9.48%/-2.28%. Maintaining the “purchase” rating, the company achieved revenue of 790 million yuan in 24Q1, or -9.48% year over year. Net profit to mother and net profit without return to mother was 0.93/90 billion yuan, respectively, -2.28%/-1.58% YoY. Net profit to mother basically met our expectations ($97 million). We maintained the company's 2024-2026 net profit of $746/7.94/835 million yuan. Comparatively, the company Wind agreed to expect an average PE value of 12x in 24, and approved the company 12xPE for 24, with a target price of 13.09 yuan (previous value of 10.91 yuan), maintaining a “buy” rating.
Gross margin increased year-on-year, depreciation surged, and net profit margin to mother improved 24Q1 company's comprehensive gross profit margin by 33.0% year on year, +1.17pct year on year. The cost rate for the 24Q1 period was 20.7%, +0.36pct. Among them, the sales/management/ R&D/ finance ratio was 6.31%/9.19%/5.91%/-0.74%, respectively, and +1.26/ -0.96/+0.49/ -0.44pct year on year. 24Q1 achieved depreciation of 2.06 million yuan, a year-on-year increase of 14.99 million yuan. The positive contribution to profit accounted for a year-on-year ratio of +1.96pct to 2.56% of revenue. Under the combined influence, the company's 24Q1 net profit margin was 11.76%, or +0.87pct year-on-year.
The balance and liability structure has improved, and receivables have decreased
At the end of 24Q1, the company's balance ratio was 59.0%, -0.73 pct year on year, compared to the end of 23 - 2.69 pct. The interest-bearing debt ratio was 4.7%, +1.66 pct year on year, and -0.13 pct year on year. 24Q1 net operating cash flow was -232 million yuan, with a year-on-year increase of 0.28 million yuan. The payment/payout ratio was 167.3%/123.5%, respectively, -1.33/+4.16pct. Bills receivable, accounts, and contract assets were $42.6/3.76 billion respectively, a decrease of $113/287 million from the end of 23. Notes and accounts payable, contract liabilities, and advance payments were respectively $37.4/1,29/53 billion, compared to $1.81/+0.25/+0.77 billion yuan at the end of 23.
Leveraging digital intelligence and pioneering exploration of the low-altitude economy, the company maintained rapid growth in digital intelligence and industry in 2023. The main holding subsidiary, Jiangsu Dinoni, signed new orders over 70% year-on-year, and revenue increased by more than 100% year-on-year. At the same time, seizing opportunities to accelerate business development in the low-altitude economy, mainly relying on the company's industry think tank (Beijing Civil Aviation Institute) +planning and design industry planning (company headquarters) +industry application (China Aviation), formed a business pattern involving the entire industry chain. In 2023, the company participated deeply in the construction and service projects of civil drone test flight bases in several cities in the province. In 2024, it successfully won bids for projects such as “Jiangsu Transportation Holdings Low Altitude (Drone) Integrated Service Management System Construction and Service Project”, “Taicang Civil Drone Test Flight Base Construction and Service Project”, and “Wujiang District Low Altitude Infrastructure System Layout Plan”.
Risk warning: New orders fall short of expectations, and EPC project repayments fall short of expectations.