GOLDEN SUN SECURITIES·2024-04-30 03:03Investment Rating - The report maintains a "Buy" rating for China Railway Group Limited (601390.SH) [3] Core Views - Q1 2024 revenue decreased slightly by 2.6% year-on-year to 265 billion yuan, with net profit down 5% to 7.48 billion yuan, primarily due to slow infrastructure work and a significant contraction in the real estate sector [1] - The company expects a significant improvement in revenue and performance in Q2 2024, driven by the issuance of new special bonds amounting to 1,129.2 billion yuan, a 78% increase from Q1 [1] - The company has a robust backlog of contracts totaling 6.2 trillion yuan, which is five times its 2023 revenue, indicating strong future revenue potential [1] Summary by Sections Financial Performance - Q1 2024 revenue by segment: Infrastructure construction 235.6 billion yuan (+0.4%), Design consulting 4.8 billion yuan (+1%), Equipment manufacturing 6.6 billion yuan (-9%), Real estate development 4.2 billion yuan (-47%), Other businesses 14.4 billion yuan (-20%) [1] - The overall gross margin for Q1 2024 was 8.6%, a decrease of 0.33 percentage points year-on-year [1] - The company’s operating cash flow for Q1 2024 was a net outflow of 68.1 billion yuan, an increase in outflow of 30 billion yuan year-on-year [1] Future Projections - Expected net profit for 2024-2026: 37.53 billion yuan (2024), 40.78 billion yuan (2025), and 44.02 billion yuan (2026), with growth rates of 12%, 9%, and 8% respectively [2] - Earnings per share (EPS) projections: 1.52 yuan (2024), 1.65 yuan (2025), and 1.78 yuan (2026) [2] - Current price-to-earnings (P/E) ratios are projected at 4.5 (2024), 4.2 (2025), and 3.9 (2026) [2] Market Position - The company’s total market capitalization is approximately 169.54 billion yuan, with a total share count of 24.75 billion shares [3] - The stock price as of April 29, 2024, was 6.85 yuan [3]