CSSC Holdings(SH:600150) GF SECURITIES·2024-09-25 08:20Investment Rating - The investment rating for the company is "Buy" with a target price of 46.3 CNY per share, compared to the current price of 35.04 CNY [3][6]. Core Views - The report highlights the announcement of a share swap merger plan between China Shipbuilding and China Shipbuilding Industry Corporation, with a swap ratio of 1:0.1335 based on the average stock prices over the last 120 trading days [2][6]. - The merger is expected to create significant scale effects and management optimization opportunities, positioning the new entity as a world-class shipbuilding company [2][6]. - The report anticipates substantial revenue growth for the company, projecting revenues of 89.93 billion CNY, 90.53 billion CNY, and 98.71 billion CNY for 2024, 2025, and 2026 respectively, with corresponding net profits of 4.45 billion CNY, 8.21 billion CNY, and 10.63 billion CNY [6][8]. Summary by Sections Profit Forecast - The report forecasts net profits of 4.45 billion CNY, 8.21 billion CNY, and 10.63 billion CNY for the years 2024, 2025, and 2026 respectively, reflecting growth rates of 50.4%, 84.6%, and 29.5% [5][6]. Revenue Breakdown - The shipbuilding and marine engineering segment is expected to generate revenues of 70.7 billion CNY, 86.8 billion CNY, 87.1 billion CNY, and 94.9 billion CNY for 2024, 2025, and 2026, with growth rates of 22.8%, 0.3%, and 9.0% respectively [7][8]. - The mechanical and electrical segment is projected to grow at a stable rate of 10% annually from 2024 to 2026 [6][8]. Valuation Metrics - The report assigns a price-to-book (PB) ratio of 4x for the company based on historical averages, leading to a target price of 46.3 CNY per share [2][8]. - The report notes that the combined market capitalization of the two companies is 254 billion CNY, indicating a relatively low starting point for the new entity [2][6].