STEC(600820) INDUSTRIAL SECURITIES·2024-04-22 09:32Investment Rating - The report maintains a "Buy" rating for the company, with an expected EPS of 1.05, 1.16, and 1.28 for 2024-2026, corresponding to PE ratios of 6.6, 6.0, and 5.4 respectively [4][11]. Core Views - The company reported a revenue of 74.193 billion yuan in 2023, a year-on-year increase of 2.62%, and a net profit attributable to shareholders of 2.939 billion yuan, up 2.92% year-on-year. The non-recurring net profit increased by 10.35% year-on-year to 2.713 billion yuan [4][5]. - The company plans to distribute a cash dividend of 849 million yuan, with a dividend payout ratio of 30.22%, and a TTM dividend yield of 5.36% as of April 19 [4][11]. - The construction business, design services, infrastructure operations, and digital information segments generated revenues of 61.36 billion yuan, 2.565 billion yuan, 5.972 billion yuan, and 317 million yuan respectively, with year-on-year changes of +3.11%, -3.85%, +20.85%, and +2.07% [4][6]. - The overall gross margin for 2023 was 10.28%, a decrease of 2.69 percentage points year-on-year, primarily due to rising subcontracting costs affecting the design and infrastructure operations segments [8][9]. - The company achieved a net profit margin of 4.28%, with a slight decline of 0.31 percentage points year-on-year, attributed to increased investment income from joint ventures and a decrease in non-current asset disposal income [9][10]. - The company’s operating cash flow per share was 1.01 yuan, a decrease of 0.18 yuan year-on-year, mainly due to increased expenditures on goods and services [10][11]. - The company is positioned as a high-dividend yield value stock, with over 70% of its revenue coming from the Yangtze River Delta region, which is expected to see solid investment growth [11]. Financial Summary - In 2023, the company signed new orders totaling 95.38 billion yuan, a year-on-year increase of 14.11%, with significant contributions from construction and operational segments [5][6]. - The projected revenues for 2024-2026 are 82.284 billion yuan, 90.928 billion yuan, and 100.118 billion yuan, with corresponding year-on-year growth rates of 10.9%, 10.5%, and 10.1% respectively [3][12]. - The gross margin is expected to improve gradually, reaching 10.5%, 10.6%, and 10.7% for 2024-2026 [3][12]. - The return on equity (ROE) is projected to increase from 10.2% in 2023 to 10.9% in 2026 [3][12].