SCG(SH:600170) HTSC·2025-04-15 09:25Investment Rating - The investment rating for the company is "Accumulate" with a target price of RMB 3.11 [6]. Core Views - The company achieved a revenue of RMB 300.2 billion in 2024, a year-on-year decrease of 1.45%, while the net profit attributable to shareholders was RMB 2.17 billion, reflecting a significant increase of 39.2% [1][4]. - The company is a key player in Shanghai's urban construction, with new orders in the Shanghai market accounting for 72% of total new orders, indicating a stable operational performance [1]. - The company’s gross profit margin for 2024 was 8.74%, a slight decrease of 0.13 percentage points year-on-year, with the fourth quarter gross margin at 10.1% [2][3]. Summary by Sections Revenue and Profitability - The company reported revenues across various segments: construction at RMB 266.7 billion (+0.7%), design consulting at RMB 4.9 billion (-16.6%), building materials at RMB 14.6 billion (-13.1%), real estate development at RMB 3.6 billion (-56.4%), and urban construction investment at RMB 1.8 billion (+5.1%) [2]. - The gross profit margins for these segments were 7.0%, 23.1%, 13.6%, 9.8%, and 89.8% respectively, with the real estate development segment showing a recovery in gross margin despite a decline in scale [2]. Non-Recurring Gains - The company realized a gain of RMB 770 million from asset disposals, contributing to a significant increase in non-recurring profits, which totaled RMB 1.55 billion, an increase of RMB 1.1 billion year-on-year [3]. Financial Forecast and Valuation - The company’s net profit forecasts for 2025-2027 have been adjusted to RMB 2.3 billion, RMB 2.43 billion, and RMB 2.54 billion respectively, reflecting increases of 21.1% and 18.1% compared to previous estimates [4]. - The target price of RMB 3.11 corresponds to a price-to-earnings ratio of 12 times for 2025, indicating a favorable valuation compared to peers [4].