CHINA RAILWAY(601390)2024-11-02 12:43Investment Rating - The investment rating for China Railway (601390) is "Buy" (maintained) [5] Core Views - The company's net profit growth for Q1-Q3 2024 is -14.3%, slightly below expectations, with total revenue of 820.3 billion yuan, down 7.26% year-on-year [5] - The report highlights a decline in revenue growth and pressure on gross margins, with a gross margin of 8.80% and a net profit margin of 2.51% for Q1-Q3 2024 [5] - The company is focusing on quality improvement and scaling down growth in response to ongoing local government debt reduction policies [5] Summary by Sections Market Data - Closing price: 6.41 yuan - One-year high/low: 7.38/4.95 yuan - Price-to-book ratio: 0.5 - Dividend yield: 3.28% - Circulating A-share market value: 130,889 million yuan [2] Financial Performance - Q1-Q3 2024 total revenue: 820.3 billion yuan, down 7.26% year-on-year - Q1-Q3 2024 net profit: 20.57 billion yuan, down 14.3% year-on-year - Q1-Q3 2024 gross margin: 8.80%, down 0.29 percentage points year-on-year [5][6] - Q1-Q3 2024 operating cash flow: net outflow of 71.3 billion yuan, an increase in receivables by 84.2 billion yuan [5] Segment Performance - Infrastructure construction revenue: 713.2 billion yuan, down 7.66% year-on-year, gross margin 7.56% - Design consulting revenue: 12.9 billion yuan, down 4.08%, gross margin 24.53% - Equipment manufacturing revenue: 19.8 billion yuan, down 1.08%, gross margin 22.73% - Real estate development revenue: 21.9 billion yuan, down 13.22%, gross margin 12.70% [5] Future Projections - Expected net profits for 2024-2026: 31.4 billion, 32.8 billion, and 34.0 billion yuan respectively, with corresponding PE ratios of 5X [5][6]