CCCC(SH:601800) Guoxin Securities·2024-09-26 10:03Investment Rating - The report maintains an "Outperform" rating for China Communications Construction Company (601800.SH) [1][3][8] Core Views - The company experienced a slight decline in revenue and net profit in the first half of 2024, with revenue at 357.5 billion yuan, down 2.3% year-on-year, and net profit at 11.4 billion yuan, down 0.04% year-on-year [1][4] - New contracts signed showed a robust growth of 8.4% year-on-year, with overseas contracts increasing by 38.9%, indicating strong international performance [1][5] - The company is adjusting its strategy to focus more on cash flow management rather than just revenue growth due to weak downstream industry conditions [10][12] Summary by Sections Financial Performance - In H1 2024, the company reported a revenue of 357.5 billion yuan, with Q1 and Q2 revenues of 176.9 billion yuan (+0.2% YoY) and 180.5 billion yuan (-4.6% YoY) respectively [1][4] - The gross margin for H1 2024 was 11.65%, showing a slight increase from the previous year [6][7] - Operating cash flow showed a net outflow of 74.2 billion yuan, which is an increase of 24.8 billion yuan compared to the previous year [7][8] Contract and Revenue Growth - The total new contracts signed in H1 2024 reached 960.9 billion yuan, with overseas contracts accounting for 196.1 billion yuan, representing 20.4% of the total [1][5] - Revenue from regions outside of mainland China increased by 23.6% year-on-year, while revenue from mainland China decreased by 7.0% [1][5] Profitability and Cost Management - The company’s operating expenses increased by 13.2% year-on-year, with management and sales expenses rising significantly [6][12] - The report forecasts a decline in net profit for the next three years, with expected figures of 22.8 billion yuan, 24.6 billion yuan, and 26.9 billion yuan for 2024, 2025, and 2026 respectively [8][10]