INDUSTRIAL SECURITIES·2024-02-26 16:00Investment Rating - The report maintains an "Overweight" rating for the company [6]. Core Views - The company is a global leader in infrastructure construction, with steady revenue growth and improving net profit margins [6]. - A new market cycle is anticipated due to changes in the external environment and ongoing state-owned enterprise reforms, which may lead to a dual boost in valuation and performance [6][17]. - Compared to the overall A-share market, the value of state-owned construction enterprises is becoming more apparent as the economy shifts towards high-quality development [19]. - The company's performance is expected to improve due to stable infrastructure growth and the advancement of three major projects [26]. - Internal optimization through the "One Profit and Five Rates" assessment is expected to enhance operational quality [26]. - Under market capitalization management assessments, the company is likely to experience a continued revaluation [26]. - Earnings forecasts for 2023-2025 are adjusted to EPS of 2.12, 2.34, and 2.59 yuan, with corresponding PE ratios of 4.1, 3.7, and 3.4 times [6]. Summary by Sections 1. National Enterprise Reform and Dual Boost in Valuation and Performance - The company is recognized as a leading global infrastructure construction group, contributing to over 50% of China's railway and about 30% of high-grade highways [12]. - Recent years have seen steady revenue growth and improved net profit margins, driving performance upward [12]. 2. Relative Perspective: A-Shares Performance Slowdown - The shift towards high-quality development has narrowed the performance gap between state-owned construction enterprises and the overall A-share market [19]. - The current PE_TTM gap indicates significant investment value in state-owned construction enterprises, suggesting potential for revaluation [19]. 3. Stable External Demand: Infrastructure Growth and Major Projects - Infrastructure construction accounts for over 50% of the company's revenue, with a significant portion coming from new contracts in 2022 [26]. - The company is expected to maintain steady growth in its infrastructure business, supported by central government leverage and ongoing major projects [26]. 4. Internal Optimization: "One Profit and Five Rates" Assessment - The implementation of the "One Profit and Five Rates" assessment is expected to enhance operational quality and improve profitability [26]. 5. Market Capitalization Management - The company is positioned for a continued revaluation, supported by management initiatives to increase dividend rates and share buybacks [26]. 6. Earnings Forecast and Valuation - The report projects earnings per share for 2023-2025 and maintains an "Overweight" rating based on favorable valuation metrics [6].