Sinoma-int(SH:600970) Soochow Securities·2024-04-29 17:00Investment Rating - Buy (Maintained) [1] Core Views - The company achieved positive revenue growth in Q1 2024 despite challenging conditions, with operating quality continuing to improve [1] - Revenue growth was supported by overseas project order conversion and expansion of maintenance services [3] - Gross margin improved to 19.5% in Q1 2024, up 2.5 percentage points year-over-year, driven by optimization of engineering margins and increased contribution from high-margin maintenance business [3] - Operating cash flow improved significantly, with net cash outflow from operating activities decreasing by RMB 803 million year-over-year [3] - New orders remained stable despite a high base, with overseas engineering and maintenance contracts performing particularly well [3] Financial Performance - Q1 2024 revenue reached RMB 10.288 billion, up 2.7% year-over-year [3] - Q1 2024 net profit attributable to parent company was RMB 636 million, up 3.1% year-over-year [3] - Gross margin improved to 19.5% in Q1 2024, up 2.5 percentage points year-over-year [3] - Net profit margin remained stable at 6.2% in Q1 2024 [3] - Asset-liability ratio stood at 62.6% as of Q1 2024, up 0.5 percentage points year-over-year [3] Order Book - Q1 2024 new contract value reached RMB 21.216 billion, down 2% year-over-year [3] - Overseas new contract value increased by 70% year-over-year, accounting for 67% of total new contracts [3] - Maintenance business performed well, with mining maintenance and cement maintenance new contract values increasing by 32% and 15% year-over-year, respectively [3] Financial Projections - 2024E revenue is projected at RMB 51.823 billion, up 13.15% year-over-year [2] - 2024E net profit attributable to parent company is projected at RMB 3.36 billion, up 15.22% year-over-year [2] - 2024E EPS is projected at RMB 1.27, with a P/E ratio of 9.85x [2] - 2025E revenue is projected at RMB 57.849 billion, up 11.63% year-over-year [2] - 2025E net profit attributable to parent company is projected at RMB 3.933 billion, up 17.07% year-over-year [2] Valuation Metrics - Current price: RMB 12.52 [5] - 52-week range: RMB 8.83 - RMB 15.10 [5] - P/B ratio: 1.68x [5] - Market capitalization: RMB 33.082 billion [5] - P/E ratio (2024E): 9.85x [2] Business Strategy - The company is the world's largest cement technology equipment and engineering system integration service provider [4] - It has strong international and localized operation management capabilities, positioning it well to capitalize on the "Belt and Road" initiative [4] - The company is implementing a "One Core, Dual Drivers, Three Businesses" strategy to optimize its structure and accelerate growth in equipment and maintenance businesses [4]