CSCEC(601668) 国海证券·2024-09-01 03:00Investment Rating - The report assigns a "Buy" rating to China State Construction Engineering Corporation (CSCEC) for the first time [5] Core Views - CSCEC's construction business remains stable, while infrastructure revenue growth is impressive [2] - The company's real estate sales area decline has narrowed, with average selling prices increasing against the trend [3] - Profitability remains stable, but cash flow is under pressure [3] - The company's order structure continues to optimize, with overseas and infrastructure orders showing high year-on-year growth [5] Financial Performance - In H1 2024, CSCEC achieved revenue of 1,144.6 billion yuan, up 2.8% YoY, with net profit attributable to shareholders of 29.5 billion yuan, up 1.6% YoY [4] - In Q2 2024, revenue was 595.3 billion yuan, up 1.2% YoY, with net profit attributable to shareholders of 14.5 billion yuan, up 2.1% YoY [4] - Gross profit margin was 9.4% in H1 2024, down 0.1 percentage points YoY [6] - Operating cash flow was -108.77 billion yuan in H1 2024, an increase of 98.21 billion yuan in outflows compared to the same period last year [6] Business Segments - In H1 2024, construction/infrastructure and investment/real estate development/investigation and design revenue was 749.3/269.5/116.4/5.4 billion yuan, with YoY growth of +1.7%/+11.7%/-8.7%/+2.8% respectively [2] - Domestic/overseas revenue was 1,088.1/56.5 billion yuan, with YoY changes of -2.3%/+3.7% respectively [2] - New contracts signed in H1 2024 totaled 2,479.7 billion yuan, up 10.0% YoY, with construction/infrastructure/investigation and design new contracts of 1,532.0/749.1/7.2 billion yuan, up +5.7%/+34.9%/-9.2% YoY respectively [5] Real Estate Business - Real estate sales in H1 2024 were 191.5 billion yuan, down 20.6% YoY, with an average price of 29,000 yuan per square meter, up 18.8% YoY [3] - China Overseas Land & Investment sales were 129.4 billion yuan, down 16.1% YoY, with an average price of 34,000 yuan per square meter, up 30.8% YoY [3] - New land reserves added in H1 2024 were 3.7 million square meters, up 3.5% YoY, mainly concentrated in first-tier cities [3] Future Outlook - Infrastructure orders are expected to continue growing in H2 2024 as special bond issuance accelerates [6] - The real estate business focuses on core first-tier cities, with land reserves growing against the trend in H1 2024 [6] - Overseas orders are growing rapidly, with potential contributions from projects along the "Belt and Road" [6] - The dividend yield is expected to reach 5.1% in 2024 based on a 20% payout ratio [6] Financial Forecasts - Revenue is expected to be 2,423.5/2,579.0/2,713.5 billion yuan in 2024/2025/2026, with YoY growth of 7%/6%/5% [7] - Net profit attributable to shareholders is expected to be 57.5/61.0/64.6 billion yuan in 2024/2025/2026, with YoY growth of 6%/6%/6% [7] - EPS is expected to be 1.4/1.5/1.6 yuan in 2024/2025/2026, with P/E ratios of 3.9/3.7/3.5 times [7]