SCG(600170) GOLDEN SUN SECURITIES·2024-04-25 09:01Investment Rating - The report maintains a "Buy" rating for Shanghai Construction (600170.SH) [3] Core Views - The company's performance showed steady recovery with significant improvement in Q4 non-recurring profit, driven by reduced impairment provisions and the absence of non-recurring gains from asset disposals seen in the previous year [1] - The company achieved a total revenue of 304.6 billion yuan in 2023, representing a year-on-year increase of 6.5%, and a net profit attributable to shareholders of 1.56 billion yuan, up 15% year-on-year [1][2] - The report highlights the growth in emerging business areas, with a notable increase in new contracts signed in Q1 2024, indicating a potential new growth driver for the company [1] Financial Performance Summary - Revenue and Profit: In 2023, the company reported a revenue of 304.6 billion yuan, with a net profit of 1.56 billion yuan, and a non-recurring net profit of 1.1 billion yuan, showing a growth of 26% year-on-year [1][2] - Quarterly Breakdown: Q4 showed a significant recovery in non-recurring profit, with a 43% year-on-year increase, while the overall quarterly revenue showed fluctuations throughout the year [1] - Cost and Margin: The overall gross margin for 2023 was 8.87%, a slight decrease from the previous year, while the net profit margin improved to 0.51% [1][2] - Cash Flow: The company reported a net cash inflow from operating activities of 21 billion yuan, a significant increase of 120% compared to the previous year, attributed to improved project settlements [1][10] Future Projections - The report projects net profits for 2024, 2025, and 2026 to be 1.94 billion yuan, 2.21 billion yuan, and 2.45 billion yuan respectively, with expected growth rates of 25%, 14%, and 11% [1][2] - Earnings per share (EPS) are forecasted to be 0.22 yuan, 0.25 yuan, and 0.28 yuan for the same years, with corresponding price-to-earnings (P/E) ratios of 11.0, 9.7, and 8.8 [2][9]