Sinoma-int(SH:600970) EBSCN·2024-05-05 10:04Investment Rating - The report maintains a "Buy" rating for the company [1][5]. Core Views - The company's revenue showed steady growth in Q1 2024, but net profit growth was impacted by foreign exchange losses due to the depreciation of the Egyptian pound. New contracts signed amounted to 21.2 billion yuan, a year-on-year decrease of 2%, although the structure of new contracts has improved with a 43% increase in production and operation service contracts [1]. - The gross profit margin continues to improve, with Q1 2024 gross and net profit margins at 19.5% and 6.6%, respectively, reflecting a year-on-year increase of 2.6% and a slight decrease of 0.1 percentage points. The company is actively expanding its overseas market, with a 70% year-on-year increase in new contracts signed abroad [1]. - The report forecasts net profits for 2024-2026 at 3.42 billion, 3.78 billion, and 4.06 billion yuan, respectively, indicating a positive outlook for profitability driven by a robust order backlog and improved contract structure [1]. Summary by Sections Financial Performance - In Q1 2024, the company achieved total revenue of 10.29 billion yuan, a year-on-year increase of 2.7%, and a net profit of 640 million yuan, up 3.1% year-on-year. The adjusted net profit increased by 12.4% [1]. - The company’s gross profit margin has been on a continuous upward trend, supported by localized operations and a focus on high-margin service and equipment businesses [1]. Profitability Forecast - The company is expected to maintain a steady growth trajectory, with net profit growth rates projected at 17.28%, 10.52%, and 7.35% for the years 2024, 2025, and 2026, respectively [3]. - The report highlights a consistent improvement in cash flow, with a net cash outflow of 1.19 billion yuan in Q1 2024, which is 800 million yuan less than the same period last year [1]. Valuation Metrics - The report provides a forecast for key financial metrics, including revenue growth rates of 14.22%, 9.64%, and 6.76% for 2024, 2025, and 2026, respectively. The P/E ratio is projected to decrease from 13 in 2022 to 8 by 2026, indicating an attractive valuation [3][8].