东兴证券：东兴晨报-20241204

Core Insights - The report highlights the deteriorating cash flow situation of major state-owned construction companies in China, with a notable decline in the cash received from sales of goods and services relative to operating income since 2022 [2][3] - It indicates that the cash flow from operating activities has significantly worsened, with a net cash flow from operating activities amounting to -397.6 billion yuan in the first three quarters of 2024, a decrease of 192.7 billion yuan year-on-year [2][3] - The report suggests that while the cash flow situation remains low, there are signs of improvement in the third quarter of 2024, indicating a potential recovery driven by government policies [10] Summary by Sections Cash Flow Analysis - The cash flow from sales of goods and services to operating income for major state-owned construction companies was 100.87% in 2022, down 2.27 percentage points from the previous year [2] - For the first three quarters of 2024, this ratio is projected to drop below 100%, reaching 95.49%, a decline of 2.34 percentage points year-on-year [2] - The cash flow from operating activities as a percentage of net income was -247.02% in the first three quarters of 2024, a decrease of 135.90 percentage points compared to the previous year [2] Company Performance - Among the seven major state-owned construction companies, China Chemical had the best cash flow situation, with a ratio of -4.19% for cash flow from operating activities to operating income in the first three quarters of 2024 [3] - Other companies like China Electric Power, China Construction, and China Railway showed significantly worse ratios, indicating the impact of tight funding in the real estate sector and local government debt pressures on their construction projects [3] Financing and Investment Trends - The report notes that these companies have increased their fundraising efforts while reducing expenditures, with cash payments for fixed assets and long-term assets amounting to 1.37 trillion yuan in the first three quarters of 2024, a decrease of 26.715 billion yuan year-on-year [3][4] - Cash inflow from financing activities reached 1.94 trillion yuan in the first three quarters of 2024, an increase of 394.088 billion yuan year-on-year, primarily driven by increased borrowing [4] Future Outlook - The report anticipates that with ongoing government debt reduction policies and a stable monetary policy, the cash flow situation for major state-owned construction companies may improve further [10] - It emphasizes that these companies, being the most competitive in the industry, are likely to benefit from policy changes, despite facing challenges from the real estate sector downturn [11]