Introduction to this report:
The profit side is under pressure due to the fact that the business environment of the enterprise has not been fully repaired, and due to changes in fair value and investment income, the profit side is under pressure, and it is expected that achievements such as science and innovation services will rise steadily.
Key points of investment:
Maintain an increase in holdings. Revenue of 2023 was 2.52 billion yuan/ -3.9%, with net profit attributable to mother of 329 million yuan/ -21%, less than expected; considering that park sales still need to be repaired, the downward forecast is that EPS will grow by 3/ 13% in 2024-25 at 0.28/0.32 yuan (originally 0.54/0.65 yuan), predicting an 11% growth rate of 0.35 yuan in 2026; using the PE/PS valuation method, the target price was lowered to 7.56 yuan to maintain growth.
Changes in fair value and return on investment affect profit side performance. 1) 2023: ① gross profit margin 24.9% /-4.32pct due to a decrease in gross margin of science and innovation services (34.7% /-14.9pct); net profit margin 12% /-7.92pct year-on-year decrease of 175 million yuan and cost growth due to fair value+ investment income; ② expense ratio 27.8% +2.55pct, of which sales/management/finance/R&D expense ratios are 4.57/11.6/5.76/ 5.87%, respectively, +0.47/ -0.15/+1.87/+0.36pct; ③ net operating Cash flow - 318 million yuan/ +2.18%; 2) 2024Q1:
① Revenue of 444 million yuan/ -21%, net profit of -36 million yuan/ -172%, fair value+investment income decreased by 88 million yuan year on year; ② Net operating cash flow - 165 million yuan, net outflow improved year on year.
Digital Cloud Technology accelerated its growth, and Star Technology initiated an upgrade and transformation. 1) In 2023, science and technology innovation service revenue was 777 million yuan/ -8.69% accounting for 30.9% because park carrier sales fell short of expectations, and strategic emerging industries accounted for 1,689 billion yuan/ -2.14% due to falling customer demand; 2) Digital industry revenue in emerging industries +71%, due to the company Shuyun Technology winning bids or signing contracts for several major projects; 3) The subsidiary Star Technology actively explores new markets and categories, and the business is expected to recover steadily.
We look forward to a steady recovery in the transformation of science and innovation services. 1) Actively explore the model and large-scale path of transformation of scientific and technological achievements; 2) Promote the elimination of innovation carriers and transform the park around “one city, one industry”; 3) Improve investment incubation and look forward to future growth.
Risk warning: Project progress and results do not meet expectations, investment incubation failure, and project exit risks, etc.