建筑行业24H1中报回顾：收入、利润承压，下半年经营有望改善

Investment Rating - The report maintains a "Positive" rating for the construction industry, indicating optimism for improvement in operations in the second half of 2024 [5][7]. Core Insights - The construction industry experienced a decline in revenue and profit in the first half of 2024, with total revenue of CNY 3.97 trillion, down 2.7% year-on-year, and net profit of CNY 933 billion, down 11.1% year-on-year [4][11]. - The industry is expected to see operational improvements in the latter half of 2024, driven by strong economic growth targets and increased infrastructure investment [5][7]. - The report highlights that the industry is focusing on enhancing asset quality rather than aggressive growth, influenced by local government debt pressures and a downturn in the real estate sector [4][11]. Summary by Sections 1. Financial Overview of the Construction Industry - In 2024H1, the construction industry reported a revenue of CNY 3.97 trillion, with a year-on-year decrease of 2.7%, and a net profit of CNY 933 billion, down 11.1% [4][11]. - The quarterly breakdown shows Q1 revenue at CNY 1.96 trillion (+2.0% YoY) and Q2 at CNY 2.01 trillion (-6.9% YoY) [4][11]. 2. ROE Analysis - The overall Return on Equity (ROE) for the industry decreased by 0.55 percentage points in 2024H1, with state-owned enterprises experiencing a decline of 0.45 percentage points [21][22]. 3. Profitability Metrics - The industry’s gross margin improved to 10.1%, up 0.2 percentage points year-on-year, while the net margin decreased to 2.35%, down 0.22 percentage points [4][11][24]. - The report notes that the decline in net margin is primarily due to increased expense ratios and higher impairment provisions [4][11]. 4. Cash Flow Analysis - The industry faced a significant cash outflow, with operating cash flow netting CNY 4,906 billion, a year-on-year increase in outflow of CNY 2,761 billion [4][16]. - The cash collection ratio for Q1 was 102% and for Q2 was 75%, indicating a decline in payment capabilities from clients [4][16]. 5. Investment Recommendations - The report recommends focusing on state-owned enterprises such as China Railway and China State Construction, highlighting their competitive advantages and potential for value [5][7]. - It also suggests monitoring companies like China Communications Construction and China Metallurgical Group for investment opportunities [5][7].