Q2 The number of new signings increased steadily, and the boom in new overseas signings remained high. According to the company's operating contract announcement, 24H1, the new contract amount was 960.9 billion yuan, +8%, of which domestic and overseas new contracts were 764.8/196.1 billion yuan, +3%/39%; 24Q2, the new contract amount was 453.6 billion yuan, +6% year-on-year, of which 348.7/104.8 billion yuan, domestic/overseas were 348.7/104.8 billion yuan, respectively, -6%/+82%, including the fifth phase of operation and maintenance of the Yala streetcar project in Melbourne, Australia (12 billion yuan) ) and other major projects.

Focus on the reform of state-owned enterprises and plan to increase the frequency of dividends. ① Develop equity incentives. According to the restricted stock announcement, the assessment requirements are based on 21, net profit CAGR ≥ 8%/8.5%/9% for 23-25, and a weighted average ROE of ≥ 7.7%/7.9%/8.2%, respectively; ② Spin-off CCCC design listing. According to the performance forecast, 24H1 CCCC Design expects to achieve net profit of 0.62-0.64 billion yuan to mother, +161%-169% YoY; ③ Focus on shareholder returns. The dividend rate was raised to 20% in 2023. The closing price on August 1 corresponds to the 23-year dividend rate of 3.4% for A shares and 7.0% for H shares, ranking third among the top eight construction central enterprises. ④ Focus on annual goals to strengthen management. According to the company's official account, CCCC Group was rated A by the State Assets Administration Commission in the 2023 Business Performance Assessment, which is the 19th year in a row that it has received an A grade evaluation. The company's 2024 semi-annual report preparation and mobilization meeting emphasized ensuring the full achievement of annual targets (the target is a growth rate of at least 13.2% for new signings and a revenue growth rate of ≥ 8.2%). ⑤ Optimize the dividend plan. According to the announcement of the “Improve Quality, Increase Efficiency, and Value Returns” action plan, the company is exploring ways to optimize shareholder returns, such as promoting dividends more than one year and dividends before the Spring Festival.

Profit forecasting and investment advice. Domestically, the company lays out an effective market for water conservancy investment, optimizes operating assets, and reduces the scale of investment. Overseas, the boom in new signings continues to be high, strengthening exchanges in the Middle East, Africa, and Southeast Asia. We expect the company's net profit to be 25.7/27.7/29.9 billion yuan in 2024-2026, maintaining the judgment that A shares have a reasonable value of 10.27 yuan/share, H shares have a reasonable value of HK$5.48 per share, and maintain the “buy” rating unchanged.

Risk warning: Infrastructure investment falls short of expectations; overseas business falls short of expectations; funding falls short of expectations.