SINOSTEEL ENTEC(000928) 国投证券·2024-05-06 01:33Investment Rating - The report maintains a "Buy-A" rating for the company with a 6-month target price of 9.26 CNY, while the current stock price is 6.48 CNY [3][31]. Core Views - The company achieved a revenue of 26.3771 billion CNY in 2023, representing a year-on-year increase of 40.92%, and a net profit of 761.5 million CNY, up 20.58% year-on-year. The company plans to distribute a cash dividend of 2.66 CNY per 10 shares, with a payout ratio of 50.11% [1][2][6]. - In Q1 2024, the company reported a revenue of 4.901 billion CNY, down 4.07% year-on-year, but the net profit increased by 3.26% year-on-year to 215 million CNY, with a significant increase in non-recurring net profit by 32.58% [1][30]. Financial Performance - The company's gross profit margin decreased to 8.79% in 2023, down 0.50 percentage points year-on-year, primarily due to increased credit impairment losses and domestic project profitability issues. The gross profit margins for domestic and overseas businesses were 9.50% and 7.58%, respectively [2][14]. - The company improved its operating cash flow, achieving a net inflow of 1.368 billion CNY, up 17.73% year-on-year. The net profit margin decreased by 0.50 percentage points to 3.05%, while the return on equity (ROE) increased to 11.07%, up 1.15 percentage points year-on-year [2][6]. Business Outlook - The company is a leading provider of metallurgical engineering services with a strong focus on low-carbon metallurgy technology. It has extensive experience in managing overseas projects and is expected to benefit from the demand for metallurgical construction along the Belt and Road Initiative [6][17]. - The company has a robust order backlog, with effective contracts totaling 37.608 billion CNY, which is 1.43 times its revenue in 2023, providing a solid foundation for future performance [6][31]. Earnings Forecast - The company is projected to achieve revenues of 29.143 billion CNY, 32.328 billion CNY, and 35.820 billion CNY for 2024, 2025, and 2026, respectively, with year-on-year growth rates of 10.5%, 10.9%, and 10.8%. The net profits are expected to be 886 million CNY, 981 million CNY, and 1.090 billion CNY for the same years, with growth rates of 16.3%, 10.7%, and 11.1% [31][32].