Core Insights - China Nuclear Engineering Corporation (CNEC) maintains stable operations with a focus on nuclear power engineering construction, reporting a new contract signing of 87.149 billion yuan in the first half of 2025, an increase of over 10.512 billion yuan or 12.06% compared to the same period last year [1][5][9] - The company has a total of 96 nuclear power units under construction as of the end of 2024, with 64 units already in operation, showcasing its strong market competitiveness [1][13] - CNEC's revenue and net profit have consistently increased since its A-share listing in 2016, with 2024 figures reaching 1135.41 billion yuan in revenue and 20.64 billion yuan in net profit, marking growth of 173.53% and 158.32% respectively since 2016 [3][9] Financial Performance - As of the first quarter of 2025, CNEC's total assets reached 240.517 billion yuan, nearly doubling since the end of 2019 [4] - The company reported a revenue of 53.184 billion yuan in the first half of 2025, with a slight year-on-year increase in net profit to 5.51 billion yuan [1][10] - CNEC's cumulative new contract amounts have shown a steady growth trend from 2019 to 2024, with annual new contracts increasing from 97.08 billion yuan in 2019 to 163.437 billion yuan in 2024, reflecting a compound annual growth rate of approximately 8.50% [8][9] Research and Development - CNEC invested approximately 3.2 billion yuan in research and development in 2024, continuing a trend of increasing R&D expenditure from 1.635 billion yuan in 2022 to 3.215 billion yuan in 2024 [2][14] - The company employs 9,165 R&D personnel, accounting for 20.65% of its total workforce, emphasizing its commitment to innovation and technological advancement [14] Market Position - CNEC is recognized as a leading enterprise in China's nuclear power engineering sector, having constructed the largest number of nuclear power units globally and maintaining a continuous presence in nuclear construction for over 30 years [13] - The company has also expanded its capabilities into industrial and civil engineering projects, successfully undertaking significant national projects across various sectors [14]

Investment Rating - The investment rating for the company is "Buy" with a target price of 10.81 RMB [8][9]. Core Views - The company reported a revenue of 1135.4 million RMB and a net profit of 20.6 million RMB for 2024, reflecting a year-on-year increase of 3.8% and 0.1% respectively. The performance was below expectations due to significant credit impairment losses in Q4 [1]. - The company is expected to benefit from the approval of 10 new nuclear power units, which will likely sustain high investment levels in the nuclear sector [1][4]. - The revenue from nuclear engineering projects increased by 34.6% year-on-year, contributing to a 29% share of total revenue, while the gross margin for Q4 improved by 1.0 percentage points year-on-year [2]. Summary by Sections Financial Performance - In 2024, the company signed new contracts worth 1634.4 million RMB, a year-on-year increase of 8.5%, and for Q1 2025, the new contracts amounted to 541.8 million RMB, up 30.7% year-on-year [2]. - The company’s R&D expense ratio slightly increased to 2.83% in 2024, reflecting higher investments in key construction areas like nuclear power [3]. - The company recorded a credit impairment loss of 20.5 million RMB in 2024, which is a 7.3% increase year-on-year [3]. Market Outlook - The approval of 10 new nuclear power units in April 2025 is expected to further stimulate nuclear investment, with a reported 48.8% year-on-year increase in nuclear investment during the first two months of 2025 [4]. - The company has secured 14 new nuclear unit construction projects in 2024, increasing the total number of units under construction to 32 by the end of 2024 [4]. Profit Forecast and Valuation - The forecasted net profits for 2025-2027 are 23.5 million RMB, 28.2 million RMB, and 32.4 million RMB respectively, reflecting a downward adjustment of 8% and 7% from previous estimates [5]. - The company’s target market value for 2025 is set at 326 billion RMB, with a target price of 10.81 RMB per share [5].