MCC(SH:601618) Haitong Securities·2024-10-30 08:47Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [1] Core Views - The report highlights that the company has shown signs of improvement in Q3, with a notable recovery in net profit, primarily due to the reversal of asset impairment and credit impairment losses [4][7] - Despite a decline in revenue and net profit for the first three quarters of 2024, the company is expected to benefit from its leading position in the metallurgical engineering industry, with a projected EPS of 0.37 and 0.39 for 2024 and 2025 respectively [7] Summary by Sections Financial Performance - For the first three quarters of 2024, the company achieved operating revenue of 412.617 billion yuan, a decrease of 11.71% year-on-year, and a net profit attributable to shareholders of 6.831 billion yuan, down 16.53% year-on-year [4] - The quarterly performance showed a narrowing decline in revenue, with Q3 revenue down 14.37% year-on-year, while net profit for Q3 increased by 177.45% year-on-year [4] - The gross profit margin for the first three quarters decreased by 0.18 percentage points to 9.04%, while the net profit margin fell by 0.38 percentage points to 1.87% [5] Cash Flow and Contracts - The company experienced a net cash outflow from operating activities of 30.736 billion yuan, an increase of 82.59% year-on-year, although Q3 showed some improvement [6] - New contracts signed in the first nine months of 2024 totaled 891.69 billion yuan, a decrease of 9.2% year-on-year, with overseas contracts increasing by 85.2% [6] Earnings Forecast - The company is projected to have an EPS of 0.37 in 2024 and 0.39 in 2025, with a reasonable valuation range of 3.35 to 3.72 yuan based on a P/E ratio of 9-10 times for 2024 [7][8]