CSCEC(601668) Guotou Securities·2024-10-28 08:23Investment Rating - The investment rating for the company is "Buy - A" with a 12-month target price of 7.32 CNY [4][8]. Core Views - The company's revenue performance in Q3 2024 faced pressure, with a year-on-year decline of 13.62%, primarily due to the ongoing downturn in the real estate sector and a slowdown in infrastructure investment [2][8]. - Despite the revenue decline, the company maintained steady growth in new contracts, particularly in industrial buildings and overseas projects, with a total new contract amount of 3.25 trillion CNY, representing a year-on-year increase of 4.7% [3][8]. - The company has effectively controlled its expense ratio, leading to an improvement in operating cash flow, which has shown a quarterly improvement throughout 2024 [4][8]. Summary by Sections Revenue and Profitability - For the first three quarters of 2024, the company achieved a revenue of 1.63 trillion CNY, down 2.67% year-on-year, with Q3 revenue significantly impacted [2][8]. - The net profit attributable to shareholders for the first three quarters was 397.03 billion CNY, a decrease of 9.05% year-on-year, with Q3 net profit down 30.16% [2][8]. Business Segments - The real estate business showed a positive growth of 1.7% year-on-year, while overseas engineering revenue grew by 8.9% [2][3]. - New contracts in the industrial building segment increased by 26.4% year-on-year, driven by the company's strengths in rapid construction and green building [3][8]. Financial Metrics - The gross margin for the first three quarters was 8.83%, a slight decline of 0.10 percentage points year-on-year, attributed to increased competition and pricing pressures [4][8]. - The company reported a net profit margin of 3.21%, down 0.17 percentage points year-on-year, with operating cash flow showing a net outflow of 770.09 billion CNY [4][8]. Future Outlook - The company expects improvements in Q4 2024 as debt reduction progresses, with long-term growth supported by state-owned enterprise reforms and favorable real estate policies [8]. - Revenue forecasts for 2024-2026 are projected at 22,623.6 billion CNY, 24,320.3 billion CNY, and 26,022.8 billion CNY, with corresponding net profits of 514.2 billion CNY, 552.1 billion CNY, and 589.7 billion CNY [8][9].