GOLDEN SUN SECURITIES·2024-08-31 10:23Investment Rating - The report maintains a "Buy" rating for China Railway (601390.SH) [3] Core Views - In Q2 2024, the company experienced a significant decline in revenue and profit, with total revenue of 544.5 billion yuan, down 7.8% year-on-year, and a net profit attributable to shareholders of 14.28 billion yuan, down 12.1% year-on-year. The decline is attributed to slow issuance of local government bonds and special bonds, which has constrained infrastructure funding [1] - The company is expected to benefit from the accelerated issuance of special bonds and national bonds in the second half of the year, leading to a marginal improvement in performance due to a low base effect [1] - The gross profit margin for H1 2024 was 9.04%, a slight decrease of 0.01 percentage points year-on-year, with the infrastructure segment showing some improvement in profitability [1] - The company’s new contract signing amount for H1 2024 was 1,078.5 billion yuan, down 15% year-on-year, with a notable decline in traditional infrastructure sectors [1] - The resource segment, particularly copper, is expected to provide profit elasticity, with the average LME copper price rising by 8% since the beginning of 2024, potentially enhancing the resource segment's profit contribution [1] Financial Summary - For H1 2024, the company reported a net cash outflow from operating activities of 69.3 billion yuan, a significant increase of 39.4 billion yuan compared to the same period last year, primarily due to delayed payments from project owners [1] - The company’s earnings per share (EPS) for 2024 is projected to be 1.26 yuan, with a corresponding price-to-earnings (P/E) ratio of 4.6 times [2][3] - The net profit attributable to shareholders is forecasted to be 31.1 billion yuan for 2024, reflecting a year-on-year decrease of 7% [2]