CRCC(601186) Haitong Securities·2024-11-02 04:09Investment Rating - The investment rating for China Railway Construction Corporation (601186) is "Outperform the Market" and is maintained [1]. Core Views - The report highlights that in the first three quarters of 2024, the company achieved operating revenue of 758.125 billion yuan, a year-on-year decrease of 5.99%. The net profit attributable to the parent company was 15.695 billion yuan, down 19.18% year-on-year [5]. - The report notes a slight narrowing of revenue decline in Q3, while the net profit decline expanded. The quarterly revenue for Q1, Q2, and Q3 showed year-on-year changes of +0.52%, -9.84%, and -8.82%, respectively [5]. - The report emphasizes that despite pressure on new orders, the backlog remains substantial, with a total of 70,873.74 billion yuan in uncompleted contracts, which is 6.23 times the total revenue for 2023 [5]. Summary by Sections Financial Performance - For the first three quarters of 2024, the gross profit margin slightly decreased to 9.16%, while the expense ratio increased to 5.33%. The net profit margin fell to 2.63%, and the weighted average ROE decreased to 5.56% [5]. - The operating cash flow showed a net outflow of 89.018 billion yuan, an increase of 106.14% year-on-year, with Q3 showing some improvement [5]. Order Book and Business Outlook - New contracts signed in the first three quarters totaled 14,734.27 billion yuan, a year-on-year decrease of 17.51%. The Q3 new contracts were 3,728.05 billion yuan, down 12.72% year-on-year [5]. - The report indicates that the company is actively pursuing green development initiatives, with new contracts in the green and environmental protection sector increasing by 43.05% [5]. Earnings Forecast - The earnings per share (EPS) for 2024 and 2025 are projected to be 1.83 yuan and 1.92 yuan, respectively. The report assigns a reasonable valuation range of 9.13 to 10.95 yuan based on a price-to-earnings ratio of 5-6 times for 2024 [5][6].