CNECC(SH:601611) GOLDEN SUN SECURITIES·2025-02-05 06:23Investment Rating - The report gives a "Buy" rating for the company [4] Core Views - The company is a leading player in nuclear power engineering construction, benefiting from the industry's cyclical growth and its strong market position [1][2] - The company has a solid financial performance with a steady increase in revenue and net profit, driven by a higher proportion of high-margin nuclear power business [1][4] - The company is actively optimizing its business structure in civil engineering, focusing on higher-margin projects while reducing exposure to cash-intensive, low-margin segments [3] Summary by Sections Company Overview - The company is the largest and most integrated enterprise in China's nuclear power engineering construction sector, having built all operational nuclear power units in the country since 1985 [1][14] - It has a diversified business model that includes nuclear power, industrial, and civil engineering, with nuclear power accounting for 22% of revenue and civil engineering for 69% in 2023 [22][23] Nuclear Power Engineering - The nuclear power sector is entering a growth cycle, with expectations for accelerated growth in the company's nuclear business due to increasing approvals for new nuclear projects [2] - The investment scale in nuclear power is projected to exceed 200 billion annually, with the company holding a significant market share in nuclear island construction [2][4] Civil Engineering - The company is strategically reducing its civil engineering business to focus on more profitable segments, leading to improved asset quality and profitability [3] - The company aims to enhance its financial metrics through debt resolution policies, which are expected to improve cash flow and reduce impairment losses [3] Financial Forecast and Valuation - The forecasted net profits for 2024-2026 are 2.31 billion, 2.67 billion, and 3.06 billion respectively, with a compound annual growth rate (CAGR) of 14% from 2023 to 2026 [4] - The earnings per share (EPS) are projected to increase from 0.77 to 1.02 over the same period, with a decreasing price-to-earnings (P/E) ratio indicating potential undervaluation [4][5]