QIFAN(605222) Huafu Securities·2024-03-28 16:00Investment Rating - The report maintains a "Buy" rating for the company [3][7]. Core Insights - The company's cash flow has significantly improved, turning positive for the year, with Q4 showing a 7% year-on-year revenue growth and a 3% quarter-on-quarter increase. Operating cash flow reached 1.78 billion, reversing the negative cash flow of 1.32 billion from Q1 to Q3 [1][6]. - The company achieved a revenue of 23.35 billion in 2023, a 13% increase year-on-year, and a net profit of 423 million, reflecting a 16% growth. However, Q4 net profit saw a 69% decline year-on-year [6][7]. - The company has a substantial order backlog in its submarine cable business, with orders amounting to 900 million, and is expected to see increased project tenders in key regions starting from Q2 [18]. Financial Data and Valuation - Revenue projections for 2024-2026 are 25.95 billion, 29.28 billion, and 33.03 billion respectively, with growth rates of 11%, 13%, and 13% [2][9]. - Net profit forecasts for the same period are 597 million, 750 million, and 918 million, with growth rates of 41%, 26%, and 22% respectively [2][9]. - The company’s earnings per share (EPS) are projected to be 1.43, 1.79, and 2.20 for 2024, 2025, and 2026 respectively, with corresponding price-to-earnings (P/E) ratios of 12, 10, and 8 [2][9]. Market Position and Competitive Strength - The company has successfully delivered its first long-length 220kV submarine cable and has received certification for 330kV and 500kV ultra-high voltage submarine cables, enhancing its competitive position in the market [18]. - The report anticipates that the company will benefit from the growing demand for offshore wind power installations, which will contribute significantly to its profitability [7][18].