CRCC(601186) GOLDEN SUN SECURITIES·2024-10-31 08:16Investment Rating - The report maintains a "Buy" rating for China Railway Construction Corporation (601186.SH) [3][5] Core Views - Q3 performance continues to show pressure, with a significant decline in net profit attributed to increased expense ratios and declining gross margins. However, policy support is expected to drive a recovery in Q4 [1][2] - The company has a substantial backlog of contracts amounting to 7.1 trillion yuan, which is 6 times its 2023 revenue, providing a solid foundation for future growth [2] Summary by Sections Financial Performance - For the first three quarters of 2024, the company reported revenue of 758.1 billion yuan, a year-on-year decrease of 6.0%, and a net profit attributable to shareholders of 15.7 billion yuan, down 19.2% [1] - The gross margin for Q1-3 2024 was 9.16%, showing a slight decline, while the expense ratio increased to 5.33%, reflecting a rise in financial costs due to expanded financing [2] - Operating cash flow showed a net outflow of 89 billion yuan for Q1-3 2024, with a marginal improvement in Q3 compared to the previous year [2] Order Intake - The total new contracts signed in Q1-3 2024 amounted to 1.4734 trillion yuan, a decrease of 17.5% year-on-year, but the decline in Q3 narrowed to 12.7% compared to a 33% drop in Q2 [2] - The infrastructure segment saw new contracts of 1.2388 trillion yuan, down 17.8%, with notable performance in mining and water conservancy sectors [2] Earnings Forecast - The report adjusts the earnings forecast for 2024-2026, projecting net profits of 22.1 billion yuan in 2024, a decrease of 15% year-on-year, with EPS expected to be 1.63 yuan per share [3][4]