CRCC(SH:601186) Guoxin Securities·2024-09-26 10:03Investment Rating - The investment rating for the company is "Outperform the Market" [1][12][20] Core Views - The company experienced a decline in revenue and net profit in the first half of 2024, with revenue at 516.14 billion yuan, down 4.6% year-on-year, and net profit at 11.9 billion yuan, down 12.8% year-on-year [1][4] - New contract amounts have decreased significantly, particularly in the investment operation sector, which saw a 58.2% year-on-year decline [1][4] - Despite the challenges, the company is expected to improve cash flow in the long term due to its strong brand influence and financing cost advantages [1][12] Summary by Sections Financial Performance - In the first half of 2024, the company achieved a revenue of 516.14 billion yuan, a decrease of 4.6% year-on-year, and a net profit of 11.9 billion yuan, down 12.8% year-on-year [1][4] - The first and second quarters of 2024 saw revenues of 27.49 billion yuan and 24.12 billion yuan, respectively, with year-on-year changes of +0.5% and -9.8% [1][4] Contracting and Operations - The total new contracts signed in the first half of 2024 amounted to 1,100.6 billion yuan, a decrease of 19.0% year-on-year, with engineering contracting new contracts at 792.9 billion yuan, down 17.5% [1][4] - The investment operation sector saw a drastic reduction in new contracts, with a year-on-year decline of 58.2% [1][4] Profitability and Margins - The overall gross margin for the first half of 2024 was 9.12%, a decrease of 1.28 percentage points from the previous year, but an increase of 0.21 percentage points compared to the same period last year [1][7] - The company’s operating expenses increased by 4.3% year-on-year, with a total of 24.77 billion yuan in expenses [1][7] Cash Flow and Asset Management - The company faced a net cash outflow from operating activities of 81.7 billion yuan in the first half of 2024, which was an increase in outflow by 62.4 billion yuan year-on-year [1][11] - Accounts receivable and contract assets showed improvements in turnover efficiency, with accounts payable decreasing by 6.3% [1][8] Future Outlook - The company has adjusted its profit forecasts downward, predicting net profits of 23.8 billion yuan, 22.0 billion yuan, and 21.4 billion yuan for the next three years [1][12] - The expected earnings per share for the next three years are projected to be 1.75 yuan, 1.62 yuan, and 1.58 yuan, with corresponding price-to-earnings ratios of 4.4, 4.7, and 4.9 [1][12]