Huachuang Securities·2024-04-01 16:00Investment Rating - The report maintains a "Strong Buy" rating for China Railway Construction Corporation (CRCC) with a target price of 10.5 CNY per share, corresponding to a PE ratio of 5.1x for 2024 [1]. Core Views - The company reported a slight revenue increase of 3.8% year-on-year, reaching 1,137.99 billion CNY, while net profit attributable to shareholders decreased by 2.2% to 26.1 billion CNY, primarily due to credit impairment losses [1]. - The revenue growth was driven by the engineering contracting and real estate sectors, although the growth rate slowed compared to the previous year [1]. - The company’s gross margin remained stable at 10.4%, with a net margin of 2.8%, reflecting solid profitability despite a decrease in cash inflow [1]. - New contract signings totaled 3,293.87 billion CNY, a year-on-year increase of 1.5%, but the growth rate has slowed compared to the previous year [1]. Financial Summary - Revenue and Profit: In 2023, total revenue was 1,137,993 million CNY, with a year-on-year growth of 3.8%. Net profit attributable to shareholders was 26,097 million CNY, down 2.0% year-on-year [1][6]. - Earnings Per Share (EPS): Projected EPS for 2024, 2025, and 2026 are 2.06, 2.18, and 2.29 CNY respectively [1][6]. - Profitability Ratios: The gross margin was 10.4%, and the net margin was 2.8% for 2023 [1][6]. - Debt and Equity: The asset-liability ratio stood at 74.9%, indicating a stable financial structure [1][6]. Business Segments - Engineering Contracting: Revenue from engineering contracting was 987.32 billion CNY, with a year-on-year increase of 2.3% [1]. - Real Estate: Real estate revenue surged by 33.8% year-on-year, reaching 83.27 billion CNY, contributing significantly to overall revenue growth [1]. - Water Conservancy Projects: The water conservancy business saw explosive growth, with new contracts increasing by 87.3% year-on-year, driven by national water network construction plans [1].