CCCCDC(600720) GF SECURITIES·2024-11-21 09:24Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 12.41 CNY per share based on a 16x PE for 2024 [3][6]. Core Views - The company reported a revenue of 6.73 billion CNY for the first three quarters of 2024, a decrease of 23% year-on-year, while the net profit attributable to shareholders was 980 million CNY, an increase of 3% year-on-year [1]. - The decline in revenue for Q3 2024 was primarily due to the optimization of the business structure and the divestment of low-margin construction operations [1]. - The company has improved its profitability metrics, with a gross margin of 30.0% in Q3 2024, up 1.2 percentage points year-on-year [2]. Summary by Sections Financial Performance - For Q1-Q3 2024, the company achieved a revenue of 6.73 billion CNY, down 23% year-on-year, and a net profit of 980 million CNY, up 3% year-on-year [1]. - In Q3 2024, revenue was 1.78 billion CNY, down 45% year-on-year, and net profit was 350 million CNY, down 28% year-on-year [1]. - The company’s gross margin improved to 30.0% in Q3 2024, reflecting a 1.2 percentage point increase year-on-year [2]. Cost and Cash Flow - The operating cash flow for Q1-Q3 2024 showed a net outflow of 1.38 billion CNY, which was an increase in outflow by 430 million CNY compared to the previous year [2]. - The company’s expense ratio (excluding R&D) for Q1-Q3 2024 was 5.16%, a slight increase of 0.09 percentage points year-on-year [2]. Future Outlook - The company is expanding into technology sectors such as vehicle-road-cloud integration and low-altitude economy, and is expected to benefit from the overseas expansion strategy aligned with its parent company [3]. - The projected net profits for 2024-2026 are estimated at 1.78 billion CNY, 1.90 billion CNY, and 2.02 billion CNY respectively [3].