The 24Q1 revenue/net profit ratio was +4.7%/+1.2%, maintaining the “purchase” rating company's 24Q1 to achieve revenue/net profit attributable to mother of 5493/149/14.7 billion yuan, +4.7%/+1.1% year-on-year, and net profit to mother basically met our expectations ($142 billion). We maintain our 24-26 net profit forecast of $575/609/64 billion yuan. Using the segmented valuation method, the average PE value of comparable construction/real estate companies in 24 years was 5/9x. Considering that housing construction accounts for a relatively high share of the company's construction business and accounts receivable recovery capacity was lower than that of comparable companies, the company was given 40.77 billion yuan of net construction profit/16.75 billion yuan net profit 4/9xPE in 24 years, adjusted the target price to 7.54 yuan (previous value of 6.74 yuan), and maintained a “buy” rating.
The construction business grew steadily and profitability improved, hedging the decline in real estate revenue. The 24Q1 company's housing construction/infrastructure/ real estate/ survey and design achieved revenue of 3658/1277/465/2.6 billion yuan respectively, +6.1%/+6.4%/-8.8%/+2.5%. The gross margin was 6.2%/8.6%/19.2%/10.8%, respectively, compared with +0.02/+0.14/+2.92/-3.23pct. The engineering business maintained steady growth and improved profitability, but was affected by high gross margin Affected by the decline in real estate revenue, the company's overall gross margin in 24Q1 was -0.01pct year over year to 8.09%.
Investment income and impairment reversals decreased year-on-year, dragging down the net profit margin of the 24Q1 company to +0.10pct to 3.76% year on year. Among them, sales/management/R&D/finance expense ratios were 0.30%/1.47%/1.15%/0.83%, respectively, and -0.03/-0.05/-0.07/+0.26pct year on year.
24Q1 achieved investment income of 680 million yuan, a year-on-year decrease of 400 million yuan, depreciation of 26.5 million yuan, and a year-on-year decline of 260 million yuan. Under the combined influence, 24Q1 net return interest rate was 2.72%, -0.09pct year on year. 24Q1 net operating cash flow - 96.6 billion yuan, an increase of 31.2 billion yuan over the previous year. It was mainly affected by a combination of factors such as a decrease in sales payments from the real estate business and an increase in land purchases. The receipt and payment ratios were 100.7%/118.7%, respectively, and -1.5/+3.8pct year on year.
New orders signed in 24Q1 were +9.6% year-on-year, and orders for industrial plants, energy engineering, and overseas increased at a high rate of 1.19 trillion yuan. 24Q1 companies signed new orders of 1.19 trillion yuan, +9.6% year-on-year. In terms of business segments, housing construction/infrastructure/survey and design were newly signed at 8062/3005/40 billion yuan respectively, +11.4%/+23.2%/-3.6% year-on-year. New contracts for industrial plants in housing construction increased 40% year over year, and new energy engineering contracts in infrastructure increased by more than 230% year over year. By region, there were 1.09 trillion new domestic signings, +13.9% year on year, and 27.2 billion yuan new overseas signings, +59.0% year over year.
The 24Q1 company added about 1.62 million square meters of land storage, about 84.87 million square meters at the end of the period, about 4.6 times the sales area in 23 years. The real estate contract sales area was 2.63 million square meters, -48% year over year, and contract sales were 77.8 billion yuan, or -31% year over year.
Risk warning: The steady growth policy falls short of expectations, and the real estate/engineering growth rate falls short of expectations.