CNECC(601611) 广发证券·2024-12-24 07:38Investment Rating - The report assigns a "Buy" rating to the company with a target price of 12.60 CNY per share based on a 17x PE valuation for 2024 [2][3]. Core Insights - The company is a leading player in nuclear power engineering, with significant revenue and profit contributions expected to continue growing, enhancing overall profitability. The projected net profits for 2024, 2025, and 2026 are 2.23 billion, 2.60 billion, and 2.92 billion CNY, respectively [2][5]. Company Overview - The controlling shareholder is the China National Nuclear Corporation, holding 56.67% of the company as of the end of H1 2024. The revenue contributions from nuclear engineering and industrial and civil engineering are 28% and 65%, respectively [5][37]. - The company has a strong market position in nuclear island construction, with a market share of 98% in civil engineering and 96% in installation engineering as of the end of 2015 [5][62]. Industry Analysis - The average annual market space for nuclear power station construction in China is estimated at 50.4 billion CNY, with high barriers to entry for nuclear island engineering services [5][72]. - The nuclear power sector is expected to grow significantly, with a projected market space of 352.8 billion CNY from 2024 to 2030, averaging 50.4 billion CNY annually [5][72]. Financial Performance - The company has shown a compound annual growth rate (CAGR) of 14.5% in revenue and 14.3% in net profit from 2019 to 2023. For H1 2024, the company reported a revenue of 546.3 billion CNY, with a year-on-year growth of 0.1% [5][42]. - The projected revenue for 2024 is 114.73 billion CNY, with a growth rate of 4.9% [6][42]. Profitability Metrics - The gross profit margins for nuclear engineering and industrial and civil engineering were 13.49% and 9.52%, respectively, in 2023, indicating stable profitability [5][48]. - The overall gross margin for the company was 11.35% in 2023, reflecting an increase of 1.28 percentage points year-on-year [5][48].