CNCEC(SH:601117) Tianfeng Securities·2024-10-31 12:48Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for the next six months [4][6]. Core Views - The company demonstrated robust revenue growth in Q3, with a total revenue of 1341.53 billion yuan for the first three quarters of 2024, reflecting a year-on-year increase of 2.38%. The net profit attributable to shareholders reached 38.38 billion yuan, up 3.09% year-on-year, showcasing the resilience of its operations [1]. - The company has signed new contracts totaling 2840.8 billion yuan in the first three quarters of 2024, a slight increase of 0.1% year-on-year, with significant growth in infrastructure and environmental governance sectors [2]. - The gross profit margin for the first three quarters of 2024 was 9.1%, an increase of 0.86 percentage points year-on-year, indicating improved profitability [3]. Summary by Sections Financial Performance - For Q3 2024, the company reported a revenue of 435.43 billion yuan, a year-on-year increase of 8.57%, and a net profit of 9.99 billion yuan, up 28.57% year-on-year. The non-recurring profit for Q3 was 1.68 billion yuan, primarily due to increased non-operating income and investment gains [1]. - The company’s cash flow from operations showed a net outflow of 56.32 billion yuan for the first three quarters of 2024, which is an increase in outflow by 22.65 billion yuan year-on-year. However, the cash flow net outflow for Q3 narrowed to 10.6 billion yuan, a reduction of 25.3 billion yuan year-on-year [3]. Order Book and Market Position - The company’s new orders in the first three quarters of 2024 included 2117 billion yuan in chemical engineering, 500 billion yuan in infrastructure, and 94 billion yuan in environmental governance, with notable growth in infrastructure and environmental governance orders [2]. - The company’s domestic orders accounted for 76.9% of total new contracts, while overseas orders decreased by 22.7% year-on-year, attributed to a high base from the previous year [2]. Profitability and Valuation - The company’s net profit margin for the first three quarters of 2024 was 3.14%, reflecting a slight increase of 0.06 percentage points year-on-year. The report projects a slight adjustment in net profit forecasts for 2024-2026, with expected net profits of 57 billion yuan, 62 billion yuan, and 68 billion yuan respectively [4][5]. - The report highlights the company’s ongoing transformation towards industrial projects, which is expected to enhance its long-term investment value [4].