2024-09-02 07:11Investment Rating - The report maintains a "Buy" rating for China Railway (601390) [2] Core Views - The company's net profit for H1 2024 decreased by 12.08% year-on-year, falling short of expectations, primarily due to a slowdown in revenue growth [2] - The company has adjusted its annual new contract signing target to 2.85 trillion yuan and revenue target to 1.23 trillion yuan, focusing on quality improvement amid a challenging external environment [2] - Despite a weak investment environment, the company is expected to maintain strong asset quality and valuation recovery potential [2] Financial Summary - For H1 2024, total revenue was 544.52 billion yuan, a decrease of 7.84% year-on-year, with a net profit of 14.28 billion yuan [2][3] - The company's gross margin and net profit margin for H1 2024 were 8.84% and 2.62%, respectively, showing slight declines compared to the previous year [2] - Operating cash flow for H1 2024 saw a net outflow of 69.3 billion yuan, an increase in outflow by 39.4 billion yuan year-on-year [2] Segment Performance - Infrastructure construction revenue for H1 2024 was 473 billion yuan, down 6.76% year-on-year, while overseas business revenue grew by 6.11% [2] - The real estate development segment experienced a significant revenue decline of 30.8% year-on-year, with a gross margin of 12.6% [2] - Domestic business revenue decreased by 8.63% year-on-year, while international business showed resilience with a 6.11% increase [2] Profit Forecast - The profit forecast for 2024-2026 has been revised downwards, with expected net profits of 31.4 billion yuan, 32.76 billion yuan, and 34.04 billion yuan for the respective years [2][3] - The projected growth rates for net profit are -6.2% in 2024, followed by positive growth of 4.3% and 3.9% in 2025 and 2026 [2]