SINOLINK SECURITIES·2024-08-17 10:03Investment Rating - The report maintains a "Buy" rating for China CRRC (601766.SH) [1][2][8] Core Views - The significant increase in high-level maintenance bidding for train sets is expected to drive growth in the maintenance and repair business [1][2] - The company has signed high-level maintenance orders totaling approximately 284.6 billion RMB in 2024, nearly doubling the amount from 2023 [2] - The acceleration in railway fixed asset investment and the recovery in passenger volume are anticipated to boost demand for railway equipment [2] - The government is promoting the update of railway equipment, which is expected to release demand for equipment replacement, benefiting the company's long-term revenue growth [2] Summary by Sections Company Overview - In 2024, the company is projected to generate revenues of 258.8 billion RMB, with net profits of 13.7 billion RMB, corresponding to a PE ratio of 16X [4][5] - Revenue growth rates are expected to be 10.49% in 2024, 10.18% in 2025, and 9.70% in 2026 [4] Business Analysis - The bidding for five-level maintenance has increased significantly, with 509 groups bid in 2024 compared to only 108 in 2023, indicating a surge in maintenance demand [2] - The company signed new maintenance orders worth 136.8 billion RMB in June-July 2024, and 147.8 billion RMB from December 2023 to March 2024 [2] - The national railway fixed asset investment grew by 10.5% year-on-year in the first seven months of 2024, indicating a recovery in railway equipment demand [2] Financial Projections - The company expects to achieve net profits of 15.4 billion RMB in 2025 and 16.7 billion RMB in 2026, with corresponding PE ratios of 14X and 13X [4][5] - The projected return on equity (ROE) is expected to increase from 8.10% in 2024 to 8.88% in 2026 [4]