CCCCDC(600720) Changjiang Securities·2024-11-04 07:23Investment Rating - The investment rating for the company is "Buy" and is maintained [3]. Core Views - The company reported a revenue of 6.727 billion yuan for the first three quarters, a year-on-year decrease of 22.99%, while the net profit attributable to shareholders was 980 million yuan, a year-on-year increase of 2.76% [3][4]. - The gross margin for the first three quarters improved to 28.56%, up 3.33 percentage points year-on-year, with a gross margin of 30.01% in Q3, an increase of 0.63 percentage points year-on-year [4]. - The cash flow outflow narrowed in Q3, with a net outflow of 1.61 billion yuan, which is a reduction of 3.31 billion yuan year-on-year [5]. Financial Performance - The company’s operating income for Q3 was 1.778 billion yuan, down 44.89% year-on-year [3]. - The comprehensive gross margin for Q3 was 30.01%, with a net profit margin of 19.86%, an increase of 4.72 percentage points year-on-year [4]. - The company’s cash flow from operating activities showed a net outflow of 1.384 billion yuan for the first three quarters, which is a decrease in outflow compared to the previous year [5]. Competitive Position - The company is a leading player in the design industry with competitive advantages, having three municipal design institutes recognized nationally [6]. - The company’s parent, China Communications Construction Company, achieved 15.3% of its business from overseas in 2023, indicating strong potential for international market expansion [6]. - In the first half of 2024, the company secured 37 new overseas projects, with a significant year-on-year increase in new contract value, achieving an overseas revenue of 294 million yuan, up 32.5% year-on-year [6]. Future Outlook - The company is expected to achieve revenues of 1.86 billion yuan, 1.96 billion yuan, and 2.07 billion yuan for the years 2024, 2025, and 2026 respectively, with corresponding valuations of 12.0, 11.3, and 10.7 times [6].