The new signings remained stable at a high level, and overseas, equipment, operation and maintenance performance was good. According to the business announcement, in 24H1, the company signed a new contract amount of 37.1 billion yuan, -9% year-on-year on a high-base basis (23H1 new contract amount of 40.6 billion yuan/year over year +68%). ① Looking at the subregions: 24H1, 13.6 billion yuan for domestic contracts, -28% year-on-year, bottomed out; 23.5 billion yuan for overseas contracts, +9% year-on-year, including equipment +58% and operation and maintenance services +37%; ② By business: 24H1, newly signed mine operation and maintenance 5.5 billion yuan, +47% year-on-year, cement operation and maintenance, 1.4 billion yuan year-on-year, +6% year-on-year.

There is plenty of room for medium- to long-term development, and the strategy for transformation from engineering to high-margin equipment and operation and maintenance is clear. According to the company's investor exchange announcement, ① Operation and maintenance business: expand non-cement+overseas mining service operation and maintenance services.

With the capital increase in Sinoma Cement, the overseas mine operation and maintenance business is expected to make another breakthrough; the technical reserves are abundant, and the layout is open pit mine operation and maintenance in non-ferrous metals. In 23, Zhongcai Mines signed 11 new non-cement aggregate mining service contracts, with revenue exceeding 0.9 billion yuan. ② Equipment business: China has more than 1,570 cement clinker production lines in operation, of which 80% of production lines have been in operation for more than 10 years. Under policy pressure, there is a large market space for technical improvement. Overseas production lines account for nearly 70% of production lines that have been in operation for more than 20 years. About 400 production lines are located in European and American countries where pressure to reduce emissions is high, and the market space for technical improvement of old overseas lines is vast. The company set up an equipment group, and the global market share is expected to increase in the context of overseas leaders competing to withdraw.

It is proposed to further increase the dividend rate and increase the return on investment safety cushion. An announcement was issued on July 12. The management intends to recommend to the board of directors that the 24-26 dividend ratio growth rate should not be less than 10%, that is, the 2024-2026 dividend ratio should not be less than 44%, 48.4%, and 53.24% on the basis of the current distributable profit for the year. The closing price on July 12 corresponds to the 23-year dividend rate of about 4%. Assuming that the 24-year dividend rate increased 10% year-on-year, the closing price corresponds to the 24-year dividend rate of about 5%.

Profit forecast and investment advice: Net profit due to mother is expected to be $3.38/3.89/4.46 billion in 24-26 years, respectively. The judgment of a reasonable value of 17.8 yuan/share remains unchanged, and the “buy” rating is maintained.

Risk warning: Business development falls short of expectations, risk of overseas operations, risk of deviations in market estimates.