ACEG(SH:600502) Changjiang Securities·2024-05-15 09:32Investment Rating - The investment rating for the company is "Buy" and is maintained [6][8]. Core Views - The company achieved a revenue of 13.538 billion yuan in the first quarter, a year-on-year decrease of 16.25%. The net profit attributable to shareholders was 310 million yuan, down 10.75% year-on-year, while the net profit after deducting non-recurring gains and losses was 284 million yuan, a decrease of 23.52% year-on-year [6][8]. - The decline in revenue is attributed to factors such as the timing of the Spring Festival and delayed construction starts. In Anhui Province, fixed asset investment growth in the first quarter was 6.3%, a decrease of 1.6 percentage points compared to 2023, with infrastructure investment growing by 10.3%, down 9.6 percentage points year-on-year [6][8]. - The company signed 551 new contracts in 2023, with a total contract value of 151.07 billion yuan, representing a year-on-year increase of 13.81%. In the first quarter, new engineering contracts totaled 38.979 billion yuan, up 1.37% year-on-year. The order structure continues to optimize, with infrastructure business accounting for 66.97% [7][8]. - The company is expected to benefit from policies related to water conservancy and state-owned enterprise reforms, with projected net profits for 2024-2026 being 1.747 billion, 2.065 billion, and 2.356 billion yuan, respectively, corresponding to PE ratios of 4.66, 3.94, and 3.45 [8]. Summary by Sections Financial Performance - In the first quarter, the comprehensive gross profit margin was 12.98%, an increase of 2.14 percentage points year-on-year. The expense ratio rose significantly, with the total expense ratio at 9.47%, up 2.34 percentage points year-on-year [14]. - The operating cash flow showed a net outflow of 3.201 billion yuan, which is an increase in outflow of 1.636 billion yuan year-on-year, with a collection ratio of 156.41%, up 11.60 percentage points year-on-year [15]. Order Growth and Structure - The company experienced a double-digit growth in orders in 2023, with a significant increase in water conservancy orders, which saw a year-on-year growth of 888.05%. The proportion of industrial park projects in housing orders was 48.77%, while projects like schools and hospitals accounted for 51.23% [7][8]. Future Outlook - The company is well-positioned to benefit from the implementation of government policies aimed at stabilizing growth and increasing investment in water conservancy. The anticipated net profit growth reflects a positive outlook for the company's performance in the coming years [8].