CNCEC(SH:601117) Tianfeng Securities·2024-09-01 12:30Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for the next six months [4][6]. Core Insights - The company achieved a total revenue of 90.61 billion yuan in the first half of 2024, a slight decrease of 0.35% year-on-year, with a net profit attributable to shareholders of 2.839 billion yuan, down 3.63% year-on-year. However, the non-recurring net profit increased by 3.46% year-on-year to 3.050 billion yuan [1]. - The overseas business continues to show strong growth, with new contracts signed amounting to 41.34 billion yuan, representing a year-on-year increase of 132.5%, which now accounts for 20.31% of total new contracts [1][2]. - The chemical engineering segment remains robust, with revenue of 73.92 billion yuan, a year-on-year increase of 4.32%, while other segments like infrastructure and environmental governance saw declines [2]. Financial Performance - The company's gross margin improved to 9.4%, an increase of 1.06 percentage points year-on-year, while the net profit margin was 3.44%, a slight decrease of 0.07 percentage points [3]. - Cash flow from operations showed a net outflow of 4.571 billion yuan, which is a significant increase in outflow compared to the previous year [3][10]. - The company expects net profits attributable to shareholders to grow by 10% in 2024, 12% in 2025, and 12% in 2026, reflecting a positive growth trajectory [4]. Business Segments - Revenue from the chemical engineering segment was 73.92 billion yuan, while infrastructure and environmental governance segments reported revenues of 10.12 billion yuan and 1.12 billion yuan, respectively, with the latter two experiencing declines [2]. - The company’s overseas revenue accounted for 22.9% of total revenue in the first half of 2024, indicating a strategic shift towards international markets [1][2]. Valuation Metrics - The report provides financial forecasts indicating a revenue growth rate of 14.88% for 2022, decreasing to 9.99% in 2024, and a projected net profit of 5.976 billion yuan for 2024 [5][11]. - The price-to-earnings (P/E) ratio is projected to decrease from 7.74 in 2022 to 5.59 by 2026, suggesting an improving valuation over time [5][11].