Xin Lang Cai Jing·2025-11-07 10:31Core Insights - The company reported a decline in revenue and net profit for the first three quarters of 2025, with total revenue at 513.915 billion yuan, down 4.23% year-on-year, and net profit attributable to shareholders at 13.647 billion yuan, down 16.14% [1] - Despite the decline in revenue, the company saw a steady increase in new contracts, with a total of 1,339.970 billion yuan signed, representing a year-on-year growth of 4.65% [1] - The company is focusing on emerging business areas, achieving new contracts worth 466.379 billion yuan, which is a 9.38% increase year-on-year, indicating market recognition of its "fully green" and "fully digital" transformation [1] Financial Performance - The gross margin for the first three quarters was 11.04%, a decrease of 0.5 percentage points year-on-year, while the net margin was 3.54%, down 0.37 percentage points [2] - The decline in gross margin was attributed to fluctuations in raw material prices, project settlement cycles, and the delivery of low-priced orders, although the gross margin showed a recovery in the third quarter at 11.80%, up 0.5 percentage points year-on-year [2] - Total operating expenses for the first three quarters were 13.38 billion yuan, with the expense ratio decreasing to 2.6% of revenue, down 0.29 percentage points year-on-year, reflecting improved management capabilities [2] Cash Flow and Debt - The company's operating cash flow improved year-on-year, with a net cash outflow of 65.8 billion yuan, which is 11.2 billion yuan less than the previous year [2] - As of the end of the third quarter, the debt-to-asset ratio stood at 76.2%, an increase of 1.01 percentage points year-on-year, while the interest-bearing debt ratio was 34.4%, up 0.18 percentage points year-on-year [2] Profit Forecast and Investment Recommendation - The company is projected to achieve net profits of 24.45 billion yuan, 24.95 billion yuan, and 25.08 billion yuan for the years 2025 to 2027, respectively, with a corresponding price-to-earnings (PE) ratio of 6 [3] - A target price of 10.71 yuan is set based on a PE of 7 for the year 2026, with an initial coverage rating of "buy" [3]