SUMEC(SH:600710) Guotai Junan Securities·2024-04-26 09:02Investment Rating - The investment rating for the company is "Accumulate" with a target price of 10.89, while the current price is 8.67 [3][4]. Core Views - The report highlights that the company's Q1 performance shows steady revenue growth and improved profitability, with a focus on undervalued high-dividend central enterprises and accelerated shipbuilding business [9][11]. - The report maintains the earnings per share (EPS) forecast for 2024-2026 at 0.83, 0.93, and 1.00 respectively, indicating a positive outlook for profitability [9][11]. Summary by Sections Financial Performance - Q1 revenue was 23.74 billion, down 23.4% year-on-year, while net profit attributable to shareholders was 2.66 billion, up 5.09% [9][11]. - The report anticipates a recovery in revenue due to business structure optimization and an increase in the proportion of industrial chain business [9][11]. Business Developments - The company secured significant new shipbuilding contracts, which are expected to enhance profit margins and contributions [9][11]. - A strategic cooperation agreement was signed with Hong Kong shipowner Huaguang Shipping for two new vessels, indicating strong future order visibility [9][11]. Valuation Metrics - The company is currently trading at a low valuation of 10.4 times PE, suggesting it remains undervalued [9][11]. - The report projects a dividend payout of 4.31 billion for 2023, with a dividend rate of 41.9% [9][11]. Market Position - The company is positioned as a benchmark central enterprise with strong resource advantages and employee incentives, which supports its operational resilience and profitability [9][11]. - The report emphasizes the company's dual-chain development strategy, which is expected to enhance operational resilience and profitability [9][11].