Zhongyan Technology (SZ:003001) Huajin Securities·2024-11-04 14:02Investment Rating - The report maintains an "Accumulate" rating for Zhongyan Dadi (003001.SZ) with a target price of 36.68 CNY [1]. Core Views - The company reported a significant increase in gross margin in Q3 2024, despite a year-on-year revenue decline of 17.21% to 557 million CNY. However, net profit attributable to shareholders increased by 192.41% to 36 million CNY, indicating improved business quality [1]. - The company is successfully transitioning its business model, with a notable increase in profitability and a shift in revenue structure away from real estate, which now accounts for only 30% of total revenue [1]. - The nuclear power sector is experiencing high demand, with the company winning a significant contract worth 159 million CNY for a nuclear power project, marking a key milestone in its expansion into this field [1]. Financial Performance Summary - For the first three quarters of 2024, the company achieved a gross margin of 34.95%, an increase of 17.04 percentage points year-on-year and 13.22 percentage points quarter-on-quarter [1]. - The company signed new contracts worth 221 million CNY in Q3 2024, a year-on-year increase of 33.35%, indicating enhanced order acquisition capabilities [1]. - The financial forecasts predict a steady increase in revenue and net profit over the next three years, with net profits expected to reach 76 million CNY, 113 million CNY, and 159 million CNY for 2024, 2025, and 2026 respectively [3][4]. Business Transition and Market Position - The company is focusing on strategic sectors such as nuclear power, water conservancy, and port construction, which are aligned with national priorities, thereby enhancing its growth potential [1]. - The revenue from new contracts in nuclear power, water conservancy, and other strategic projects is expected to increase, further supporting the company's performance [1]. - The company has demonstrated strong cost control measures, with a decrease in various expense ratios compared to the previous year, showcasing its operational efficiency [1].