CCCCDC(SH:600720) INDUSTRIAL SECURITIES·2024-03-31 16:00Investment Rating - The report initiates coverage with a "Buy" rating for China Communications Design (600720) [3][16]. Core Views - In 2023, the company achieved operating revenue of 13.511 billion yuan, a year-on-year increase of 2.16%, and a net profit attributable to shareholders of 1.766 billion yuan, up 4.18% year-on-year [5][6]. - The company plans to distribute a dividend of 530 million yuan, corresponding to a dividend payout ratio of 30%, with a dividend yield of 2.8% based on the closing price on March 27 [5][6]. - The company completed an asset restructuring, officially transitioning to the engineering design sector, which is expected to enhance its market position and operational efficiency [8][11]. Financial Performance - The company's revenue by segment includes: surveying and design (9.658 billion yuan, +17.82%), engineering general contracting and project management (2.589 billion yuan, -31.73%), engineering testing and inspection (0.512 billion yuan, +17.04%), supervision (0.343 billion yuan, +13.26%), and other businesses (0.207 billion yuan, -44.01%) [6][7]. - The gross profit margin for 2023 was 27.17%, an increase of 0.95 percentage points year-on-year, with expectations for continued improvement as existing projects are completed [6][7]. - The net profit margin for 2023 was 13.28%, a slight decrease of 0.02 percentage points year-on-year, primarily due to investment losses and fair value changes [7][8]. Earnings Forecast - The forecasted earnings per share (EPS) for 2024, 2025, and 2026 are 0.91 yuan, 0.98 yuan, and 1.06 yuan, respectively, with corresponding price-to-earnings (PE) ratios of 10.1x, 9.4x, and 8.7x based on the closing price on March 27 [4][16].