West Construction(002302) 西南证券·2024-10-25 10:01Investment Rating - The report does not provide a specific investment rating for the company [1]. Core Views - The company reported a total revenue of 15.02 billion yuan for the first three quarters of 2024, a year-on-year decrease of 8.1%, and a net profit attributable to shareholders of 0.1 billion yuan, down 97.3% year-on-year [1]. - The company has seen an increase in market share despite a decline in sales prices, with a total signed contract volume of 10,930 million cubic meters in the first three quarters of 2024, up 13.5% year-on-year [1]. - The company is expected to benefit from a recovery in downstream demand and has a solid order backlog, with a projected compound annual growth rate (CAGR) of 3.8% in revenue from 2025 to 2026 and a staggering 273.3% in net profit [1][2]. Summary by Sections Company Overview - The company is a leading player in the concrete industry, established in 2001 and is the only development platform for ready-mixed concrete under China State Construction Engineering Corporation [5][10]. - It has a national presence with operations in 26 provinces and is actively expanding into overseas markets such as Malaysia and Indonesia [5][10]. Performance Analysis - The company’s performance has been under pressure due to a decline in the real estate market, with a compound annual growth rate of -24.8% in new construction area from 2021 to 2023 [10]. - The average sales price of concrete decreased by 8.8% to 339.9 yuan per cubic meter in Q3 2024, influenced by weak downstream demand and intensified competition [1][10]. - The gross profit margin fell by 2.2 percentage points to 9.6% in Q3 2024 due to declining sales prices [1][14]. Market Position and Competitive Advantage - The company has a strong competitive advantage, being the only platform for ready-mixed concrete under China State Construction, and is well-positioned to benefit from favorable industry policies and infrastructure investments [1][10]. - The company’s market share continues to increase, and it is expected to benefit significantly from the recovery of the real estate market and infrastructure projects [1][10]. Financial Forecast - Revenue is projected to decline by 5.78% in 2024, followed by a modest recovery with a growth rate of 2.59% in 2025 and 5.06% in 2026 [2][16]. - The net profit is expected to rebound significantly in the coming years, with a forecasted growth rate of 398.01% in 2025 and 176.29% in 2026 [2][16].