Sinoma-int(SH:600970) Yong Xing Zheng Quan·2024-07-10 10:00Investment Rating - The report initiates coverage with a "Buy" rating for the company [2][3]. Core Views - The company is the only enterprise in the global cement technology equipment and engineering services market with a complete industrial chain, enhancing its global competitiveness. It is the largest cement technology equipment engineering system integration service provider globally, with a revenue of 45.8 billion and a net profit of 2.9 billion in 2023, representing year-on-year growth of 6.9% and 14.8% respectively [1][31]. - Future highlights include steady growth in new contracts, an increase in revenue and profit, and a rising proportion of income from equipment and operations, which have higher gross margins compared to the engineering segment [1][31]. - The company has accelerated overseas contract signing, with a year-on-year increase of 55% in 2023 and 70% in Q1 2024, significantly outpacing domestic contract growth [1][42]. Summary by Sections Company Overview - The company integrates high-end equipment manufacturing and mining operation services, having expanded its business scope through acquisitions. It aims to achieve a balanced development across engineering, equipment, and services by the end of the 14th Five-Year Plan [1][31][34]. Financial Performance - In 2023, the company achieved a revenue of 45.8 billion and a net profit of 2.9 billion, with a compound annual growth rate (CAGR) of 42% in net profit from 2013 to 2023. The new contract total reached 61.6 billion, marking an 18% increase year-on-year [40][42]. Market Demand - The demand for cement in overseas markets remains robust, with the company benefiting from the ongoing infrastructure development in Belt and Road Initiative countries. The domestic market is also expected to see significant demand for the renovation of existing production lines due to energy-saving and carbon reduction policies [36][50]. Business Segments - The engineering segment, which primarily focuses on EPC (Engineering, Procurement, and Construction) services, reported a revenue growth of 7.6% in 2023, with a gross margin improvement of 3.5 percentage points. The company has successfully secured contracts in various international markets [46][50]. - The high-end equipment manufacturing segment is expected to grow significantly, with a projected global market size of 35-40 billion by 2025, indicating substantial room for market share expansion [1][34]. Future Outlook - The company forecasts net profits of 3.35 billion, 3.81 billion, and 4.31 billion for 2024, 2025, and 2026 respectively, with corresponding earnings per share (EPS) of 1.27, 1.44, and 1.63 [2][7].