Xin Lang Cai Jing·2025-11-10 00:30Core Viewpoint - China Communication Technology Co., Ltd. (China Tonghao) reported a revenue of 21.748 billion yuan for the first three quarters of 2025, representing a year-on-year increase of 4.48%, while net profit attributable to shareholders decreased by 3.16% to 2.284 billion yuan [1] Revenue Breakdown - In the first three quarters of 2025, revenue from the railway sector was 12.604 billion yuan, up 4.78% year-on-year; urban rail revenue was 5.781 billion yuan, up 14.46%; overseas revenue was 1.382 billion yuan, down 21.90%; and revenue from engineering contracting and other sectors was 1.980 billion yuan, up 0.8% [2] - The total orders in the railway sector reached 17.252 billion yuan, up 17.95% year-on-year, while urban rail orders were 5.656 billion yuan, up 16.12%; overseas orders were 2.022 billion yuan, down 48.30% [2] Profitability Analysis - The gross margin for Q3 2025 was 27.6%, a decrease of 4.0 percentage points year-on-year and 2.5 percentage points quarter-on-quarter, likely due to changes in product delivery [3] - The company’s rail transit control system business includes design integration, system delivery services, and equipment manufacturing, with varying gross margins influenced by delivery schedules [3] Market Opportunities - The rail renovation market is expected to drive order growth, with new high-speed rail renovation projects signed in the first half of the year amounting to 1.48 billion yuan, up 74.86% year-on-year [3] - In Q3, the company continued to win bids for railway renovation projects in regions like Harbin and Inner Mongolia, and urban rail projects in cities such as Wuhan and Beijing [3] - The company’s backlog of orders remains strong, with inventory at 4.114 billion yuan, up 8.3% year-on-year, and contract liabilities exceeding 10 billion yuan [3] Low-altitude Economy Development - The low-altitude economy sector continues to show promise, with new contracts signed in Q3 close to the first half's levels, including projects for low-altitude tourism and inspection services [4] - The company aims to develop a comprehensive low-altitude economy structure, focusing on airspace management, drone manufacturing, and service operations [4] Future Outlook - The company maintains a "buy" rating, projecting net profits of 3.704 billion yuan and 4.187 billion yuan for 2025 and 2026, respectively, with corresponding price-to-earnings ratios of 15.4 and 13.6 [4]