CRRC(601766) HTSC·2024-10-31 08:00Investment Rating - The report maintains a "Buy" rating for the company [7][5]. Core Views - The company reported a revenue of 152.58 billion RMB for the first three quarters of 2024, representing a year-on-year increase of 6.67%, with a net profit of 7.25 billion RMB, up 17.77% year-on-year. The third quarter alone saw revenues of 62.54 billion RMB, a 12.2% increase year-on-year, and a net profit of 3.04 billion RMB, up 13.1% year-on-year [1][2]. - The railway equipment business continues to grow significantly, with a revenue of 71.76 billion RMB for the first nine months of 2024, a year-on-year increase of 36.69%, primarily driven by increased sales of high-speed trains and passenger cars [3]. - The company has signed new contracts for advanced repairs of high-speed trains worth 28.46 billion RMB since December 2023, indicating a positive trend in maintenance services, which are expected to become a significant growth driver [4]. Revenue and Profitability - The gross margin for the first three quarters of 2024 was 21.21%, a slight decrease of 0.61 percentage points year-on-year, while the net margin improved by 0.6 percentage points to 6.21% [2]. - The company’s operating expenses showed good control, with sales and management expense ratios decreasing by 1.56 percentage points and 0.16 percentage points, respectively, while R&D expenses increased by 0.78 percentage points [2]. Order Book and Future Outlook - The company secured approximately 212.2 billion RMB in new orders in the first nine months of 2024, slightly up from 211.5 billion RMB in the same period last year, with international contracts accounting for about 34.2 billion RMB [3]. - The report anticipates that the demand for new high-speed trains and advanced repairs will continue to rise, benefiting the company as a leading player in the rail transit equipment sector [1][5]. Valuation - The target price for the company's A/H shares is set at 10.07 RMB and 7.69 HKD, respectively, based on a projected PE ratio of 19/13.3 for 2024, reflecting the company's strong market position and growth potential [5][7].