Core views:

China Railway Construction released its 2024 quarterly report. According to the first quarterly report, in 24Q1, the company achieved revenue of 274.949 billion yuan, +0.52% year over year; net profit to mother of 6.025 billion yuan, +1.98% year over year; and deducted non-net profit of 5.777 billion yuan, +1.99% year over year.

Net operating cash outflow increased, while net investment cash outflow decreased. 24Q1 net operating cash outflow was 46.6 billion yuan, 23Q1 net outflow was 39.2 billion yuan; net investment cash outflow was 13.7 billion yuan, 23Q1 net outflow was 15.2 billion yuan, and 24Q1 net investment cash outflow was the lowest in the past four years. 24Q1 Net operating cash outflow increased while net investment cash outflow decreased.

New orders are steady, and overseas orders are growing rapidly. The company signed new orders of 55.690 billion yuan in 24Q1, +2.05% year-on-year. Among them, domestic business signed new orders of 516.744 billion yuan, or +1.46% year-on-year; new orders for overseas business reached 33.946 billion yuan, an increase of 11.85% over the previous year. By business, engineering contract orders were RMB 410.112 billion, +3.12%; investment and operation orders were RMB 46.365 billion, +6.65%; green environmental orders were RMB 27.68 billion, +36.70%; planning and design consulting orders were RMB 5.782 billion, -32.31%; industrial manufacturing orders amounted to RMB 6.893 billion, +5.05% YoY; real estate development orders amounted to RMB 13.716 billion, +1.85% YoY; material logistics orders amounted to RMB 34.042 billion, YoY -12.83%, of which green Environmental orders are growing rapidly.

Actively implement overseas priority strategies, and the new chairman is looking forward to continuous management optimization. The company vigorously implements the “overseas priority” strategy, promotes integrated overseas development, and accelerates the improvement of international business standards.

Furthermore, on January 31, the company's board of directors resolved that Dai Hegen would take over the position of chairman of the company. Mr. Dai served as the president of China Railway and was the chairman of China Chemical for 17 years. During his tenure, he promoted the rapid development of China Chemical. After taking office, he looked forward to the continuous optimization of the company's own management.

Profit forecasting and investment advice. The company's net profit for 24-26 is estimated at 286/314/34.7 billion yuan.

Keep the reasonable value of A shares at $10.53 per share and the reasonable value of H shares at HK$5.94 per share, corresponding to the company's PE valuation of 5 times over 24 years, and maintain the “buy” rating.

Risk warning: infrastructure investment falls short of expectations; project resumption falls short of expectations; overseas business risks, etc.