CSCEC(601668) 国泰君安·2024-09-25 06:08Investment Rating - The report maintains a "Buy" rating for China State Construction Engineering Corporation (CSCEC) with a target price of CNY 7.76, corresponding to a 2024 PE of 5.5x [1][3] Core Views - CSCEC is expected to benefit from the loosening of monetary and real estate policies, including a 0.5 percentage point cut in the reserve requirement ratio (RRR) and a 0.5 percentage point reduction in existing mortgage rates [2][3] - The minimum down payment ratio for second homes nationwide has been reduced from 25% to 15%, and the central bank's support ratio for the CNY 300 billion affordable housing relending program has increased from 60% to 100% [3] - New monetary policy tools have been created to support stock market stability, including a CNY 300 billion stock repurchase and buyback relending facility [3] Business Performance - CSCEC's real estate sales in August increased by 9% YoY, with land acquisitions by its subsidiaries Zhongjian Yipin and Zhongjian Zhidi growing by 53% and 49% respectively [3] - From January to August 2024, CSCEC's cumulative new contract signings reached CNY 2.85 trillion, a 7% YoY increase, with infrastructure and overseas business growing by 32% and 114% respectively [3] - The company's real estate contract sales for the first eight months of 2024 totaled CNY 233.9 billion, a 20% YoY decline, with a 32% drop in contract sales area [3] Financial Metrics - CSCEC's PB ratio stands at 0.50x, near the bottom of its 10-year historical range, with a dividend yield of 5.2% [3] - The company maintains the highest credit ratings in the global industry, with ratings of A/A2/A from S&P, Moody's, and Fitch respectively [3] - CSCEC plans to achieve new contract signings exceeding CNY 4.5 trillion in 2024, a 4.1% YoY increase, and revenue exceeding CNY 2.38 trillion, a 5.1% YoY increase [3] Historical Valuation and Financial Indicators - CSCEC's net profit has grown from CNY 9.24 billion in 2010 to CNY 58.21 billion in 2024E, with a CAGR of 7% [4] - The company's average PE ratio has fluctuated between 3.1x and 9.9x over the past decade, with a current 2024E PE of 3.7x [4] - CSCEC's ROE has remained stable, ranging from 12.1% to 18.6% over the past 14 years, with a 2024E ROE of 13.4% [4] Business Segments - In H1 2024, CSCEC's building construction business grew by 5.7% YoY, with industrial plant construction increasing by 26.1% [5] - The infrastructure construction and investment segment saw a 34.9% YoY growth, driven by a 230.4% surge in energy engineering [5] - Real estate development and investment declined by 20.6% YoY, while overseas business grew by 107.4% [5][6]