CSCEC(601668) 天风证券·2024-10-28 08:11Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for the next six months [4][6][13]. Core Views - The company has shown significant improvement in cash flow during Q3, with a notable increase in energy and water orders, despite facing pressure in the construction and infrastructure sectors [1][2]. - The company has a robust order backlog, which is expected to support performance recovery in the upcoming quarters, particularly with anticipated fiscal stimulus measures [1][4]. - The report highlights the company's ability to enhance market share during industry downturns, driven by its leading position and potential increases in cash dividends [4][6]. Summary by Sections Financial Performance - For the first three quarters of 2024, the company reported revenue of 1,626.5 billion yuan, a year-on-year decrease of 2.67%, and a net profit attributable to shareholders of 39.7 billion yuan, down 9.05% [1]. - In Q3 alone, revenue was 481.9 billion yuan, reflecting a 13.62% decline year-on-year, with net profit dropping 30.16% to 10.3 billion yuan [1][3]. - The gross margin for the first three quarters was 8.83%, a slight decrease of 0.1 percentage points year-on-year [3]. Order and Revenue Structure - The company signed new construction contracts totaling 29,874 billion yuan in the first three quarters, an increase of 7.9% year-on-year, with significant growth in energy and water sectors [2]. - The revenue breakdown shows that the construction and infrastructure segments faced declines, while the industrial plant sector saw a 26.4% increase in new contracts [2]. Cash Flow and Financial Ratios - The company reported a net cash flow from operations of -77.01 billion yuan for the first three quarters, but Q3 saw a positive cash inflow of 31.76 billion yuan [3]. - The report indicates a net profit margin of 3.21%, down 0.19 percentage points year-on-year, and a total expense ratio of 4.16% [3][8]. Future Projections - The forecast for net profit attributable to shareholders for 2024-2026 has been adjusted to 52.0 billion, 54.2 billion, and 56.3 billion yuan, respectively, reflecting a downward revision from previous estimates [4][5]. - The company is expected to maintain a strong market position and gradually reveal its long-term value, supported by government initiatives and market conditions [4][6].