CNCEC(SH:601117) EBSCN·2025-05-04 14:53Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company has shown impressive growth in its industrial sector, with continuous improvement in profitability. In 2024, the company achieved operating revenue of 185.84 billion yuan, a year-on-year increase of 4.2%, and a net profit attributable to shareholders of 5.69 billion yuan, up 4.8% year-on-year [4][9] - The company’s new projects have driven growth in the industrial sector, and overseas business has seen a significant increase in demand. The revenue from the chemical engineering, infrastructure, environmental governance, and industrial sectors has shown varied growth rates, with the industrial and new materials sector growing by 13.4% [5][9] Summary by Sections Financial Performance - In 2024, the company reported operating revenue of 185.84 billion yuan, net profit attributable to shareholders of 5.69 billion yuan, and net profit after deducting non-recurring gains and losses of 5.51 billion yuan, reflecting year-on-year growth of 4.2%, 4.8%, and 6.0% respectively. In Q1 2025, the company achieved operating revenue of 44.50 billion yuan, net profit of 1.44 billion yuan, and net profit after deducting non-recurring gains and losses of 1.41 billion yuan, with year-on-year changes of -1.0%, +18.8%, and +22.6% [4][5] Business Segments - The company’s revenue from various segments in 2024 included 152.2 billion yuan from chemical engineering, 20.6 billion yuan from infrastructure, 2.2 billion yuan from environmental governance, 8.8 billion yuan from industrial and new materials, and 1.6 billion yuan from modern services, with respective year-on-year growth rates of +6.9%, -6.4%, -22.1%, +13.4%, and -47.7% [5] Contracting and New Projects - The company signed new contracts worth 366.9 billion yuan in 2024, a year-on-year increase of 12.3%. The new contracts in chemical engineering, infrastructure, and environmental governance were 276.3 billion yuan, 64.9 billion yuan, and 9.5 billion yuan, reflecting growth rates of 5.8%, 56.3%, and 19.2% respectively. In Q1 2025, new contracts surged to 59.79 billion yuan, a 60.7% increase year-on-year [6] Profitability and Margins - The company’s gross margin and net margin for 2024 were 10.1% and 3.4%, respectively, with year-on-year increases of 0.7% and 0.01 percentage points. In Q1 2025, the gross margin was 9.3% and the net margin was 3.6%, reflecting increases of 1.29% and 0.58 percentage points year-on-year [7] Cash Flow and Dividends - The company experienced a net outflow of operating cash flow of 8.72 billion yuan in 2024, a decrease of 4.1 billion yuan compared to the previous year. The proposed dividend for 2024 is 1.86 yuan per share, totaling approximately 1.14 billion yuan, which is a 4.5% increase year-on-year [8] Profit Forecast and Valuation - The company’s profit forecast for 2025 and 2026 has been adjusted to 6.43 billion yuan and 6.89 billion yuan, representing increases of 8% and 4% respectively. The forecast for 2027 is set at 7.35 billion yuan, maintaining a "Buy" rating [9]