Tianfeng Securities·2024-09-01 12:30Investment Rating - The report maintains a "Buy" rating for the company [4][6]. Core Views - The company experienced revenue pressure in the first half of 2024, with total revenue of CNY 516.14 billion, down 4.6% year-on-year, and a net profit attributable to shareholders of CNY 11.90 billion, down 12.8% year-on-year [1][4]. - The real estate development business showed significant growth, with a revenue increase of 47.3% year-on-year, while other segments faced declines [2][4]. - The company is focusing on cost reduction and efficiency improvement measures to enhance financial statement quality [1][4]. Financial Performance Summary - In H1 2024, the company reported a gross margin of 9.12%, a slight increase of 0.21 percentage points year-on-year, while the net profit margin was 2.9%, down 0.15 percentage points year-on-year [3]. - The cash flow from operations (CFO) was negative at CNY -816.76 billion, a decline of CNY 623.33 billion year-on-year, indicating a need for cash flow optimization [3]. - The company’s new contract value in H1 2024 was CNY 1,100.6 billion, down 19.0% year-on-year, with a significant drop of 32.9% in Q2 [2][4]. Business Segment Analysis - Revenue from engineering contracting, planning and design consulting, industrial manufacturing, real estate development, and logistics for H1 2024 was CNY 451.6 billion, CNY 8.0 billion, CNY 11.2 billion, CNY 31.5 billion, and CNY 42.2 billion respectively, with the real estate segment showing the highest growth [2]. - The company is actively expanding into emerging sectors such as urban renewal, water conservancy, new energy, and ecological protection, with new green environmental orders signed amounting to CNY 93.3 billion, up 33.5% year-on-year [2][4]. Valuation Metrics - As of August 30, the company's price-to-earnings (P/E) and price-to-book (P/B) ratios were at 18% and 3% historical percentiles over the past five years, respectively, with a dividend yield of 4.5% [1][4]. - The forecast for net profit attributable to shareholders for 2024-2026 has been slightly adjusted to CNY 27.3 billion, CNY 28.5 billion, and CNY 29.8 billion respectively [4].