ACEG(SH:600502) Guotou Securities·2024-04-26 13:30Investment Rating - The report maintains a "Buy - A" rating for the company with a target price of 6.99 CNY, corresponding to a dynamic PE of 7 times for 2024 [17][6][15]. Core Views - The company's revenue performance is under short-term pressure but is expected to maintain steady growth for the year. In Q1 2024, the company achieved operating revenue of 13.538 billion CNY, a year-on-year decrease of 16.25%, and a net profit attributable to shareholders of 310 million CNY, down 10.75% year-on-year. The decline is attributed to increased rain and snow, insufficient resumption of work after the Spring Festival, and delays in project commencement [1][15]. - The company continues to optimize its order structure, with significant potential in emerging businesses. In Q1 2024, the company signed new engineering contracts totaling 38.979 billion CNY, a year-on-year increase of 1.37%. The infrastructure and construction sectors accounted for 66.97% and 33.03% of total orders, respectively [2][15]. - The company is focusing on high-quality orders in its construction business, with water conservancy engineering contracts showing remarkable performance, achieving a new contract amount of 6.037 billion CNY, a year-on-year increase of 888.05% [2][15]. Financial Performance Summary - The company forecasts operating revenues of 98.868 billion CNY, 106.392 billion CNY, and 113.031 billion CNY for 2024, 2025, and 2026, respectively, representing year-on-year growth rates of 8.36%, 7.61%, and 6.24% [6][7]. - Net profits are projected to be 1.713 billion CNY, 1.862 billion CNY, and 1.993 billion CNY for the same years, with growth rates of 10.30%, 8.67%, and 7.04% [6][7]. - The company's cash flow is expected to improve, with a focus on the development of prefabricated construction and significant progress in the integration of its testing business [6][15]. Key Financial Metrics - In Q1 2024, the company's overall gross margin and net margin were 12.98% and 2.93%, respectively, reflecting improvements of 2.14 and 0.23 percentage points year-on-year [16]. - The company reported a net cash flow from operating activities of -3.201 billion CNY, indicating an increase in net outflow compared to the same period in 2023 [16]. - As of March 31, 2024, the company's asset-liability ratio was 85.74%, a slight increase of 1.26 percentage points year-on-year [16].