SUMEC(SH:600710) Soochow Securities·2024-04-26 15:30Investment Rating - The report maintains an "Increase" rating for the company, indicating an expected relative performance of the industry index to the benchmark of 5% or more over the next six months [2][7]. Core Views - The company's Q1 2024 performance shows a 5.1% year-on-year increase in net profit attributable to shareholders, aligning with expectations, while total revenue decreased by 23.4% year-on-year [3][6]. - The business structure is improving, with the industrial chain segment becoming a core growth driver, while the supply chain segment faces challenges [6][7]. - The company is characterized as undervalued with high dividends and growth potential, maintaining a dividend payout ratio above 40% from 2020 to 2023 [7]. Financial Performance Summary - In Q1 2024, the company achieved total revenue of 23.74 billion yuan, a decrease of 23.4% year-on-year, while net profit attributable to shareholders was 266 million yuan, an increase of 5.1% year-on-year [3]. - The company’s revenue forecast for 2024 is 11.74 billion yuan, with a projected year-on-year growth rate of 7.54% [2][6]. - The earnings per share (EPS) for 2024 is estimated at 0.85 yuan, with a price-to-earnings (P/E) ratio of 9.95 based on the latest diluted EPS [2][7]. Business Segment Analysis - The company’s revenue composition in 2023 was 25% from the industrial chain and 75% from the supply chain, with profit contributions of 63% and 37% respectively [6]. - The industrial chain segment is expected to continue its strong growth momentum, driven by significant projects in clean energy and shipbuilding, as well as partnerships in the consumer textile sector [6][7].