24Q1 net profit without return to mother +656% year-on-year, maintaining the “buy” rating. In the first quarter of 2024, the company achieved a total operating income of 32,443 billion yuan, +21.74%; net profit to mother was 84 million yuan, -47.79% year over year; net profit after deducting non-return to mother was 225 million yuan, +656.19% year over year. We expect net profit to be 26/36/4.4 billion yuan for 24-26, and the corresponding PE is 19/14/11. Comparatively, the 24-year Wind unanimously expected an average PE value of 20 times. As an industry leader, the company enjoyed a certain valuation premium of 23 times PE and a target price of $11.27; referring to the average PE ratio of H/A shares from 23 to now, the HKD exchange rate was 0.91, corresponding to the target price of PE15x for H shares and HK$8.08 (previous value 7.92) for H shares, maintaining a “buy” rating.
After deducting the net interest rate of non-return to mother +0.58pp, the financial expense ratio declined in the first quarter of 2024. In the first quarter of 2024, the company achieved gross profit margin of 10.18%, -3.5pp year on year; net interest rate of 0.26%, -0.34pp year on year; net profit margin of 0.69%, +0.58pp year on year. In terms of the period expense ratio, the total cost rate for the first quarter was 7.97%, -3.07pp year on year. Among them, the sales expense ratio was 1.79%, -0.29pp; the management expense ratio was 4.21%, -0.81 pp; the financial expense ratio was 0.47%, -1.44pp; and the R&D expense ratio was 1.50%, -0.53 pp. The decline in the financial expense ratio is mainly due to an increase in exchange earnings due to an increase in exchange rates in the current period.
Commodity trade recovery+the impact of the Red Sea incident. The container sector business continued to grow. The commodity trade recovery trend compounded the impact of the Red Sea incident, and the company's container manufacturing business continued to grow. Global commodity trade showed a steady recovery trend in the first quarter of 2024, and the growth rate of North American container imports accelerated. At the same time, due to ongoing geopolitical events such as the Red Sea incident, the risk of uncertainty in the global shipping market increased, and shipping companies' willingness to prepare containers increased markedly, and the company's container manufacturing business grew dramatically. Among them, the cumulative sales volume of standard dry cargo containers was 494,400 TEU, +499.27%; the cumulative sales volume of refrigerated containers was 0.93 million TEU, or -23.14%; and the cumulative sales volume of special dry goods containers was 35.000 units, or -47.05% YoY.
The clean energy business continues to grow under the environmental protection trend. There are plenty of orders in hand to be released, and the energy sector has plenty of orders in hand, and we look forward to full release of performance in the future. CIMC's 2024Q1 subsidiary CIMIC had revenue of 4.635 billion yuan, -6.8% year on year; new orders received 7.478 billion yuan, +35.7% year over year. As of the end of March 2024, CIMC Enric's active orders reached 26.904 billion yuan, +41.9% year-on-year. Among them, under major social and environmental trends such as increased natural gas consumption, increased demand for environmentally friendly ships, and frequent policies favorable to hydrogen energy, the company's 24Q1 clean energy business continued to grow: 1) Demand for terminal application equipment such as LNG vehicle bottles continued to grow, winning the bid for 1,000 sets of double 1500L LNG vehicle bottles; 2) Shipbuilding business orders continued to land, and 2+2 new ships of 40,000 meters. New shipbuilding orders, such as LPG/liquid ammonia carriers, etc., delivered an 8200m3 LNG tanker.
Risk warning: risk of economic cycle fluctuations, deterioration of the competitive pattern in the drilling equipment market, price fluctuations of major raw materials, financial market fluctuations and exchange rate risks.