CNECC(SH:601611) Minsheng Securities·2024-06-20 07:00Investment Rating - The report initiates coverage with a "Buy" rating for the company [4][35]. Core Views - The company is positioned as a leading player in domestic nuclear power construction and is expected to benefit significantly from the acceleration of nuclear capital expenditures [4][9]. - The global trend towards nuclear power development is clear, with opportunities for the company to tap into the "Belt and Road" market [3][23]. - The nuclear engineering construction sector is entering a high prosperity phase, with expectations of reduced credit impairment impacts [4][24]. Summary by Sections Domestic Nuclear Power Construction Leader - The company is recognized as a domestic leader in nuclear power construction, poised to benefit from the current acceleration in nuclear capital expenditures [4][9]. - Nuclear energy is highlighted as a clean and efficient non-fossil energy source, essential for balancing renewable energy challenges [9][10]. Global Nuclear Power Development Trends - As of January 2024, there are 58 nuclear reactors under construction globally, with a total net installed capacity of 59.87 GW, of which China's external regions account for 36.14 GW [3][17]. - The report indicates that by 2030, 107 new nuclear reactors are planned in countries along the "Belt and Road," adding a total of 115 GW of nuclear capacity [23][24]. Nuclear Engineering Construction Prosperity Phase - The company's nuclear engineering revenue grew from 11.92 billion yuan in 2014 to 23.93 billion yuan in 2023, with a CAGR of 8.0% [4][24]. - The report anticipates significant revenue growth in nuclear engineering, projecting revenues of 28.71 billion yuan, 34.17 billion yuan, and 40.15 billion yuan for 2024-2026, with year-on-year growth rates of 20%, 19%, and 18% respectively [33][34]. Profit Forecast and Investment Recommendations - The company is expected to achieve net profits attributable to shareholders of 2.40 billion yuan, 2.82 billion yuan, and 3.24 billion yuan for 2024-2026, with corresponding dynamic PE ratios of 10x, 9x, and 8x [4][35]. - The report emphasizes the company's strong market position and potential for profit elasticity due to previous credit impairment impacts [4][29].