Sinoma-int(SH:600970) Changjiang Securities·2024-04-19 05:31Investment Rating - The investment rating for the company is "Buy" and is maintained [5]. Core Views - The company reported a total order amount of 21.22 billion, a year-on-year decrease of 2%, with engineering, equipment, and operation and maintenance orders changing by -12%, +2%, and +43% respectively. Domestic orders decreased by 48%, while overseas orders increased by 70% [5]. - The company demonstrated resilience despite a high base in Q1 2023, maintaining stable orders. The order structure is improving, with high-margin equipment and operation orders increasing from 25% in Q1 2023 to 29% in Q1 2024, while low-margin engineering orders decreased [5][6]. - The company is expected to achieve stable growth in Q1 2024, with a projected annual growth rate exceeding 15%, supported by a strong order base from 2023 and an increasing share of equipment and operation businesses [5][6]. - The company’s overseas revenue accounted for 44% of total revenue in 2023, with a gross margin of 48%. The high growth and high-margin overseas business provide a solid foundation for future revenue and earnings growth [6]. - The current market valuation corresponds to an expected annual performance of over 3.3 billion, with a PE ratio of 9x, indicating that the company is undervalued given its growth potential and cash flow [6]. - The company is anticipated to achieve earnings of 3.355 billion, 3.901 billion, and 4.459 billion from 2024 to 2026, with corresponding PE valuations of 9.2, 7.9, and 6.9 times [6].