GF SECURITIES·2025-12-16 06:50Investment Rating - The report assigns a "Buy-A/Buy-H" rating for the company, with a current price of 5.87 CNY and a reasonable value of 7.27 CNY for A-shares, and 4.18 HKD with a reasonable value of 4.88 HKD for H-shares [6]. Core Views - The company will significantly improve its cash flow by recovering 2 billion CNY in receivables, as part of a broader initiative to address local government debt risks [6]. - The historical dividend payout ratio is between 30%-40%, with expectations for an increase in future dividends due to improved cash flow from receivables recovery [6]. - The company is projected to achieve positive free cash flow in 2024, with a forecasted net profit of 865 million CNY for 2023, declining to 807 million CNY in 2024, and then increasing to 951 million CNY in 2025 [6][2]. - The report anticipates a continuous increase in gross margin, reaching 39.8% in 2024, driven by a higher proportion of high-margin operational revenue [6]. Financial Summary - Revenue Forecast: - 2023A: 4,665 million CNY - 2024A: 4,827 million CNY - 2025E: 4,978 million CNY - 2026E: 5,068 million CNY - 2027E: 5,151 million CNY - Growth rates are projected at 3.2% for 2023, 3.5% for 2024, and declining thereafter [2]. - Net Profit Forecast: - 2023A: 865 million CNY - 2024A: 807 million CNY - 2025E: 951 million CNY - 2026E: 1,001 million CNY - 2027E: 1,041 million CNY - Notable growth of 15.2% in 2023, followed by a decline in 2024, and a rebound in subsequent years [2]. - Earnings Per Share (EPS): - 2023A: 0.55 CNY - 2024A: 0.51 CNY - 2025E: 0.61 CNY - 2026E: 0.64 CNY - 2027E: 0.66 CNY [2]. - Valuation Ratios: - Price-to-Earnings (P/E) ratio is projected to decrease from 10.1 in 2023 to 8.9 in 2027 for A-shares, and from 6.3 to 4.1 for H-shares over the same period [2].