CSCEC(SH:601668) GUOTAI HAITONG SECURITIES·2025-09-01 11:08Investment Rating - The report maintains a rating of "Buy" for China State Construction Engineering Corporation (601668) [3][8]. Core Views - The report highlights that the company's net profit attributable to shareholders increased by 3.2% in H1 2025, with a notable 5.9% growth in Q2 [2][4]. - The company is considered undervalued in the market, with a dividend yield of 4.88% and a projected PE ratio of 6.2x for 2025, leading to a target price of 7.42 CNY [3][6]. Financial Performance Summary - In H1 2025, the company's revenue was 1.11 trillion CNY, a decrease of 3.2% year-on-year, with Q2 showing a decline of 7.1% [4]. - The gross profit margin for H1 2025 was 9.43%, with a slight increase in Q2 to 11.01% [4]. - The net profit attributable to shareholders for H1 2025 was 30.4 billion CNY, reflecting a 3.2% increase, while the net profit margin improved to 2.74% [4][5]. Cash Flow and New Contracts - The operating cash flow showed a net outflow of 82.83 billion CNY in H1 2025, an improvement from 108.77 billion CNY in the same period of 2024 [5]. - New contracts signed in H1 2025 totaled 2.501 trillion CNY, a year-on-year increase of 0.9%, with significant growth in infrastructure projects [5][19]. Market Position and Valuation - China State Construction is recognized as one of the largest investment and construction groups globally and is included in major indices such as CSI 50 and MSCI China A50 [6]. - The company aims to achieve new contract signings exceeding 4.6 trillion CNY in 2025, with 54.4% of this target already completed by H1 2025 [6][19].