CRCC(601186) 光大证券·2024-11-08 18:01Investment Rating - The report maintains a "Buy" rating for both A and H shares of China Railway Construction Corporation (601186.SH/1186.HK) [2][5][7] Core Views - The company reported a decline in revenue and net profit for the first three quarters of 2024, with revenue of 758.13 billion yuan and a net profit attributable to shareholders of 15.7 billion yuan, representing a year-on-year decrease of 6% and 19.2% respectively [2] - Despite the overall decline, there was an improvement in cash flow in the third quarter of 2024, with a net cash outflow of 73.4 billion yuan, which is less than the outflow of 165 billion yuan in the same period last year [3] - The company is experiencing a significant increase in green and environmental orders, with new contracts for green projects reaching 125.2 billion yuan, a year-on-year growth of 43.1% [4] - The company is actively developing new strategic industries and is expected to improve financial metrics as debt reduction progresses [4][5] Financial Performance Summary - For the first nine months of 2024, the company’s gross profit margin was 9.2%, and the net profit margin was 2.6%, both showing slight year-on-year decreases [3] - The financial expense ratio has increased, impacting profitability, with financial expenses rising significantly [3] - New contracts signed in the first nine months of 2024 totaled 1,473.4 billion yuan, a decrease of 17.5% year-on-year, with domestic and international contracts also declining [4] - The company’s long-term receivables from PPP projects amounted to 10.5 billion yuan, indicating ongoing efforts to manage debt effectively [4] Profit Forecast and Valuation - The profit forecast for 2024-2026 has been revised downwards, with net profit estimates of 23.2 billion yuan, 23.4 billion yuan, and 23.7 billion yuan respectively, reflecting reductions of 18%, 23%, and 26% [5] - The report highlights that despite the challenges, improvements in cash flow and growth in green orders could lead to better financial indicators in the future [5]