Guoxin Securities·2024-04-01 16:00Investment Rating - The report maintains a "Buy" rating for China Railway (601390.SH) [1][4][20] Core Views - The company's overall performance growth is stable, with a significant acceleration in the fourth quarter. The revenue for 2023 reached 1,263.48 billion yuan, a year-on-year increase of 9.5%, and the net profit attributable to shareholders was 33.48 billion yuan, up 7.1% year-on-year [1][6] - The mining business is expected to contribute more to the company's performance, with a notable increase in revenue from this segment [2][3][18] - The company has a robust order backlog, with a new contract amount of 31,006 billion yuan in 2023, reflecting a year-on-year growth of 2.2% [1][11] Financial Performance - In 2023, the company achieved a weighted ROE of 11.8%, a slight decrease of 0.3 percentage points year-on-year, while the gross margin improved to 10.0%, an increase of 0.2 percentage points [2][16] - The cash flow from operating activities was 38.36 billion yuan, indicating room for improvement in cash flow management [2][16] - The mining resources segment generated revenue of 8.37 billion yuan, a year-on-year increase of 11.5%, with a gross margin of 59.7% [2][18] Earnings Forecast - The profit forecast for 2024 and 2025 has been slightly adjusted downwards to 38 billion yuan and 42 billion yuan, respectively, with expected year-on-year growth rates of 13.4% and 10.6% [3][4][18] - The report introduces a new profit forecast for 2026, estimating a net profit of 43 billion yuan, representing a year-on-year growth of 2.4% [4][18] Valuation - The reasonable valuation range for the company is set between 8.08 and 8.90 yuan, indicating a premium of 12.3% to 23.8% over the current stock price [4][20]