CHALIECO(601068) Haitong Securities·2024-09-27 10:09Investment Rating - The investment rating for the company is "Outperform the Market" [1][61]. Core Insights - The company is a leader in non-ferrous metal engineering technology, backed by the China Aluminum Group, which provides advantages in project acquisition. The company focuses on its core industrial sectors and expands into overseas markets under the "Technology + International" strategy [5][13]. - In the first half of 2024, the company's revenue from engineering design and consulting, engineering construction and contracting, and equipment manufacturing accounted for 11.76%, 76.00%, and 11.84% respectively, with domestic and overseas revenue shares of 82.4% and 17.6% [5][19]. - The company has seen a significant turnaround in profitability, with a revenue increase of 11.31% and a return to profitability in net profit for the first half of 2024 [5][25]. Summary by Sections Company Overview - The company was established in 2003 and became the first "A+H" listed non-ferrous engineering technology company in 2018. It is wholly owned by the China Aluminum Group, which holds 77.16% of the shares [5][13][16]. - The company has optimized its business structure by focusing on its core non-ferrous engineering sectors and reducing non-core operations [19]. Financial Analysis - The company has experienced stable revenue with a slight decline in recent years, but a significant improvement in net profit in the first half of 2024, achieving a net profit of 1.56 billion yuan [25][29]. - The new order structure has been optimized, with industrial contracts increasing to 85.49% of new orders, while contracts in civil construction and municipal engineering have decreased significantly [29][31]. - The gross profit margin improved to 9.58% in the first half of 2024, with a net profit margin of 1.86% [31][34]. Industry Outlook - The non-ferrous metal industry is expected to grow steadily, with policies supporting growth and a strong demand for green and intelligent transformation under the "dual carbon" goals [36][43]. - The company is well-positioned to benefit from the industry's low-carbon transformation due to its advanced green metallurgy technologies [46]. Equipment and Maintenance Business - The equipment maintenance business is expected to grow rapidly, supported by large-scale equipment upgrades in the non-ferrous industry [49]. - The company has made significant progress in expanding its overseas business, with revenues from overseas operations increasing by 239.8% in 2023 and 88.32% in the first half of 2024 [53][55]. Profit Forecast and Valuation - The forecasted net profit for 2024 and 2025 is 2.21 billion yuan and 2.49 billion yuan respectively, with a reasonable valuation range of 4.87 to 5.29 yuan per share [57][60].