CHINA RAILWAY(601390) 国泰君安·2024-11-04 08:45Investment Rating - The report maintains a rating of "Buy" for China Railway Group [6][4]. Core Views - The report indicates that China Railway Group's net profit for the first three quarters of 2024 has decreased by 14.33% year-on-year, which is below expectations, primarily due to an increase in accounts receivable and a slowdown in the construction industry's physical workload [4][6]. - The forecast for EPS has been revised downwards for 2024-2026 to 1.16, 1.20, and 1.22 yuan, reflecting a year-on-year decline of 14% for 2024 [4][17]. - The target price has been adjusted to 9.50 yuan, corresponding to a PE ratio of 8.2 times for 2024 [4][6]. Financial Summary - For the first three quarters of 2024, revenue was 818.48 billion yuan, a decrease of 7.3% year-on-year, with net profit attributable to shareholders at 20.57 billion yuan, down 14.33% [4][5]. - The company’s expense ratio was 5.06%, with a net profit margin of 2.51% and a weighted ROE of 7.11% [4][5]. - The cash flow from operating activities was -71.3 billion yuan, compared to -33.7 billion yuan in the same period of 2023 [4][5]. Order Intake - New signed contracts for the first three quarters of 2024 totaled 1,527.9 billion yuan, a decrease of 15.2% year-on-year, with a notable decline in various segments including engineering construction and real estate [4][14]. - The domestic new signed contracts were 1,404.6 billion yuan, down 16.1% year-on-year, while overseas contracts decreased by 3.2% to 123.2 billion yuan [4][14]. Dividend and Valuation - The current dividend yield is 3.2%, and the price-to-book ratio is 0.55, indicating a historical low [4][6]. - The report highlights that the company is expected to benefit from fiscal policies aimed at increasing investment, which may enhance both profit and asset performance [4][6].