CHINA RAILWAY(601390) 华龙证券·2024-11-05 09:40Investment Rating - The investment rating for the company is "Accumulate" (maintained) [1] Core Views - The company's performance is under short-term pressure due to the downturn in the real estate industry and ongoing debt repayment pressures from local governments. In the first three quarters, the company reported a revenue of 818.48 billion yuan, a year-on-year decrease of 7.3%, and a net profit attributable to shareholders of 20.57 billion yuan, down 14.33% year-on-year. The return on equity (ROE) for the first three quarters was 7.11%, a decline of 1.31 percentage points year-on-year [1] - Despite the challenges in traditional business areas, the company is actively optimizing its business structure, with significant growth in new business orders. The new contracts signed in the first three quarters amounted to 1.53 trillion yuan, a year-on-year decrease of 15.2%. However, new business areas such as resource utilization saw contract amounts increase by 23.4% and 22% respectively [1] - The company has established five modern mines in the mineral resources sector, with leading reserves in copper, cobalt, and molybdenum among domestic peers. The upward trend in major metal prices is expected to contribute to new revenue streams [1] Financial Summary - For the first three quarters of 2024, the company achieved a revenue of 818.48 billion yuan, a decrease of 7.3% year-on-year, and a net profit of 20.57 billion yuan, down 14.33% year-on-year [1] - The forecast for the company's net profit for 2024-2026 has been revised down to 29.75 billion yuan, 29.66 billion yuan, and 31.46 billion yuan respectively, with corresponding earnings per share (EPS) of 1.20 yuan, 1.20 yuan, and 1.27 yuan [1][2] - The company's current valuation level is comparable to the average valuation of peer companies, maintaining a reasonable valuation with a price-to-earnings (P/E) ratio of 5.4 for 2024 [1][3]