EBSCN·2025-05-06 03:00Investment Rating - The report maintains a "Buy" rating for both A-shares and H-shares of China Railway Construction Corporation (601186.SH/1186.HK) with current prices at 7.81 CNY and 4.94 HKD respectively [1]. Core Views - The company experienced operational pressure in 2024, with a year-on-year decline in revenue and net profit. However, cash flow showed improvement in Q1 2025 [5][6]. - The company has a sufficient backlog of contracts, with a continuous optimization of contract structure, particularly in green and emerging industries [7]. - Despite the challenges, the company is expected to maintain a stable dividend policy, proposing a dividend of 3 CNY per 10 shares, reflecting an 18.34% payout ratio [8]. Summary by Sections Financial Performance - In 2024, the company reported revenues of 1,067.17 billion CNY, a decrease of 6.2% year-on-year, with a net profit of 22.22 billion CNY, down 14.9% [5]. - For Q1 2025, revenues were 256.76 billion CNY, a decline of 6.6% year-on-year, with net profit at 5.15 billion CNY, down 14.5% [5]. Revenue Breakdown - The revenue from various segments in 2024 showed declines: Engineering Contracting (-5.7%), Planning and Design Consulting (-3.9%), Industrial Manufacturing (-2.5%), Real Estate Development (-13.7%), and Material Logistics (-9.4%) [6]. - The company’s domestic and overseas revenue in 2024 was 1,001.27 billion CNY and 65.90 billion CNY respectively, with a year-on-year change of -7.1% and +9.3% [6]. Contracting and Orders - New contracts signed in 2024 totaled 30,369.7 billion CNY, a decrease of 7.8% year-on-year, with overseas contracts growing by 23.4% [7]. - In Q1 2025, new contracts amounted to 4,928.5 billion CNY, down 10.5% year-on-year, but with significant growth in green and real estate projects [7]. Cash Flow and Expenses - The company faced significant cash outflows in 2024, with a net cash outflow of 31.42 billion CNY, but showed improvement in Q1 2025 with a net inflow of 3.95 billion CNY [8]. - The financial expense ratio increased due to foreign exchange losses, impacting net profit margins [8]. Profit Forecast and Valuation - The profit forecast for 2025 and 2026 has been adjusted to 22.33 billion CNY and 22.88 billion CNY respectively, reflecting a downward revision of 4% and 3% [8]. - The report maintains a "Buy" rating based on the company's strong contract backlog and ongoing structural improvements [8].