Guotou Securities·2025-11-02 06:04Investment Rating - The investment rating for China Railway Construction Corporation (601186.SH) is maintained at "Buy-A" with a 12-month target price of 9.19 CNY, compared to the current stock price of 7.95 CNY [5]. Core Insights - The company's revenue for the first three quarters of 2025 was 728.403 billion CNY, a year-on-year decrease of 3.92%. The net profit attributable to shareholders was 14.811 billion CNY, down 5.63% year-on-year. However, in Q3 2025, revenue was 239.204 billion CNY, showing a smaller decline of 1.15% year-on-year, while net profit increased by 8.34% year-on-year to 4.11 billion CNY [1][2][3]. Revenue and Profitability - The decline in revenue is primarily attributed to weak demand in traditional downstream business sectors. The gross profit margin decreased to 8.77%, down 0.39 percentage points year-on-year, and the net profit margin was 2.37%, down 0.26 percentage points year-on-year [2][3]. - The operating cash flow showed significant improvement, with a net outflow of 79.757 billion CNY, which is 9.261 billion CNY less than the previous year [2][3]. Contracting and Order Backlog - The company signed new contracts worth 1.52 trillion CNY in the first three quarters, a year-on-year increase of 3.08%. Domestic contracts accounted for 1.31 trillion CNY (down 3.96% year-on-year), while overseas contracts surged to 204.821 billion CNY, up 94.52% year-on-year [4]. - As of the end of September, the total uncompleted contract amount was 8.10 trillion CNY, approximately 7.59 times the expected revenue for 2024, indicating a robust order backlog that supports future revenue generation [4]. Financial Forecast - Revenue projections for 2025-2027 are estimated at 1.08 trillion CNY, 1.10 trillion CNY, and 1.11 trillion CNY, with year-on-year growth rates of 1.50%, 1.30%, and 1.30%, respectively. The net profit for the same period is forecasted to be 22.47 billion CNY, 22.73 billion CNY, and 22.99 billion CNY, with corresponding year-on-year growth rates of 1.15% [9][10].