SMHC(SH:600131) Tianfeng Securities·2024-05-06 01:00Investment Rating - The investment rating for the company is "Buy" with a target price indicating a potential upside of over 20% within the next six months [4][17]. Core Views - The company achieved a total revenue of 7.673 billion yuan in 2023, representing a year-over-year growth of 0.76%, and a net profit attributable to shareholders of 828 million yuan, up 3.43% year-over-year [1]. - The company is optimistic about the digitalization trend in the power sector, despite facing challenges in Q1 2024 due to market fluctuations and a decrease in contract signings [1][2]. - The company aims for a revenue target of 8.49 billion yuan in 2024, reflecting a year-over-year increase of 10.65% [2]. Financial Performance Summary - In 2023, the company reported a gross margin of 21.56% and a net margin of 10.79%, with a slight increase in both metrics compared to the previous year [1]. - For Q1 2024, the company recorded a revenue of 1.019 billion yuan, down 23% year-over-year, and a net profit of 12 million yuan, down 83.2% year-over-year [1]. - The company’s revenue breakdown for 2023 includes: - Power Digitalization: 2.056 billion yuan, up 24.43% year-over-year - Enterprise Digitalization: 1.955 billion yuan, down 4.58% year-over-year - Cloud Network Infrastructure: 3.639 billion yuan, down 6.56% year-over-year [1]. Revenue Forecast - The revenue forecast for 2024-2026 has been adjusted to 8.52 billion yuan, 9.79 billion yuan, and 10.97 billion yuan respectively, with corresponding net profit estimates of 1.01 billion yuan, 1.20 billion yuan, and 1.39 billion yuan [2][3]. - The projected growth rates for net profit are 21.91% in 2024, 18.73% in 2025, and 15.96% in 2026 [2][3]. Business Segments - The company is focusing on five major business segments for future growth: Digital Infrastructure, Cutting-edge Technology Innovation, Power Digitalization Applications, Enterprise Digitalization Applications, and Energy Innovation Services [2]. - The company plans to implement digitalization projects across seven provincial networks in 2024, enhancing its service offerings in the power sector [1].