CCA(SH:603100) Huaxin Securities·2024-10-14 11:30Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook for investment [1]. Core Views - The company is experiencing steady growth in performance and continuous improvement in operational quality, driven by strong demand in downstream industries supported by favorable policies [1]. - The company is actively expanding its overseas market presence, achieving significant growth in new orders, with a year-on-year increase of 86% in the first half of 2024, showcasing its strong competitiveness in international markets [1][3]. - Continuous investment in research and development is a priority, with R&D expenses reaching 264 million yuan in the first half of 2024, representing a year-on-year increase of 4.67% and accounting for 7.05% of operating revenue [1][3]. Summary by Sections Market Demand and Policy Support - The industrial automatic control system devices are widely used in sectors such as petrochemicals, metallurgy, and electricity, which are crucial for the high-end, intelligent, and green transformation of manufacturing [1]. - The demand for technological upgrades and equipment renewal in downstream industries is expected to broaden the development space for the industry [1]. Overseas Market Expansion - The company is deepening collaborations with major engineering firms and actively exploring markets in Southeast Asia, South Asia, the Middle East, and Africa [1]. - The overseas market's high gross margin for orders presents a new growth point despite higher service costs and longer project cycles [1]. Research and Development - The company has implemented 24 national and provincial-level technology projects and has made significant progress in key R&D projects [1][3]. - The company aims to maintain R&D investment at over 7% of revenue, enhancing its competitive advantage and market share [1][3]. Financial Forecast - The company is projected to achieve revenues of 82.07 billion yuan, 92.76 billion yuan, and 105.43 billion yuan for the years 2024, 2025, and 2026, respectively [4]. - The earnings per share (EPS) are forecasted to be 1.59 yuan, 1.82 yuan, and 2.11 yuan for the same years, with corresponding price-to-earnings (P/E) ratios of 12.3, 10.7, and 9.2 times [4].