Jereh Group(SZ:002353)2024-10-28 00:41Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for its stock performance relative to the market [5][7]. Core Views - The company reported a slight decline in Q3 performance, with total revenue for the first three quarters of 2024 at 8.047 billion yuan, down 8.10% year-over-year, and a net profit attributable to shareholders of 1.598 billion yuan, up 2.21% year-over-year [5][6]. - The decline in revenue is attributed to high revenue baselines from large orders executed in the previous year and delays in equipment delivery, which significantly impact revenue recognition [6]. - The company has a robust order backlog, with a notable increase in contract liabilities, indicating strong new order acquisition and an expansion in overseas markets [6][7]. Summary by Sections Financial Performance - For the first three quarters of 2024, the company achieved a revenue of 8.047 billion yuan, with a year-over-year decrease of 8.10%. The net profit attributable to shareholders was 1.598 billion yuan, reflecting a year-over-year increase of 2.21% [5][6]. - The gross margin improved due to a better revenue mix, with a gross margin of 35.02% for the first three quarters, up 1.51 percentage points year-over-year [6]. Order and Market Expansion - The company secured a significant order worth approximately 22 billion yuan in Q3, contributing to a total contract liability of 1.495 billion yuan, which represents a 68% year-over-year increase [6][7]. - The company is actively expanding its overseas business, with a recent contract with Bahrain National Oil Company for multiple gas booster station projects valued at 3.16 billion USD [6]. Future Outlook - The company is expected to reverse the revenue decline trend in Q4, which is typically a strong quarter for revenue recognition [6]. - Profit forecasts for 2024 to 2026 are projected at 2.793 billion yuan, 3.263 billion yuan, and 3.827 billion yuan, respectively, with corresponding price-to-earnings ratios indicating a favorable valuation [7].