SINOLINK SECURITIES·2024-08-01 02:03Investment Rating - The report maintains a "Buy" rating for China CRRC (601766.SH) [1] Core Views - The company has recently signed contracts worth approximately 459.9 billion RMB, including significant orders for high-level maintenance of train sets, indicating strong growth potential in the maintenance business [1] - The railway fixed asset investment is accelerating, and passenger volume is recovering, which is expected to boost demand for railway equipment [2] - The government is promoting the replacement of old railway equipment, which is likely to enhance long-term revenue growth for the company [2] Summary by Sections Company Overview - In June and July 2024, the company signed contracts totaling approximately 459.9 billion RMB, which represents about 19.6% of its 2023 revenue [1] - The contracts include 136.8 billion RMB for high-level maintenance of train sets, 82 billion RMB for freight cars, and 75.3 billion RMB for urban rail vehicles [1] Operational Analysis - The company is expected to see high growth in the train set maintenance business due to the increasing demand for five-level maintenance as the number of train sets grows [1] - The national railway fixed asset investment increased by 7.5% in 2023 and is projected to grow by 10.6% in the first half of 2024, indicating a recovery in railway equipment demand [1][2] Financial Forecasts - Revenue projections for 2024-2026 are 258.8 billion RMB, 285.2 billion RMB, and 312.8 billion RMB, respectively, with net profits of 13.7 billion RMB, 15.4 billion RMB, and 16.7 billion RMB [2][4] - The company is expected to maintain a price-to-earnings ratio (P/E) of 15X, 13X, and 12X for the years 2024-2026 [2]