9M24 公司经营性现金流净额-890 亿元，同比多流出458 亿元，收/付现比分别为101%/111%，同比-3.4/+1.1pct，其中24Q3 净额为-73 亿元，同比少流出165 亿元，环比少流出277 亿元，单季收/付现比分别为110%/112%，同比-2.3/-14.6pct，环比+24.0/+11.6pct。24Q3 末资产负债率76.8%，同比+1.24pct；有息负债率28.1%，同比+6.62pct。The company released a three-quarter report: 9M24 achieved revenue of 758.1 billion yuan, a year-on-year ratio of -5.99%, and achieved net profit attributable to mothers/net profit deducted from non-mother of 157/14.8 billion yuan, or -19.84% year-on-year. 24Q3 achieved revenue of 242 billion yuan, -8.82% year-on-year, and the month-on-month decline narrowed by 1.02 pct, and net profit of 3.793 billion yuan, or -34.27% year-on-year. We believe that the company's revenue side improved month-on-month, and that the profit side was affected by increased cash flow pressure in the industry chain. Financial expenses dragged down performance due to an increase in the size of interest-bearing debt. As the policy shifts to steady growth and debt, Q4 profit performance is expected to improve, and A/H maintains a “buy” rating.
The 24Q3 comprehensive gross margin improved year-on-year, driving 9M24's net profit margin to increase the 9M24 company's comprehensive gross profit margin by 9.16%, -0.01pct year on year. The 24Q3 gross margin was 9.24%, -0.45 pct year on year, and -1.39 pct month-on-month. The cost ratio for the 9M24 period was 5.33%, +0.63 pct year on year, and 6.45% year on year, +1.12 pct year on year. Among them, sales/management/R&D/finance cost ratios were -0.01/-0.04/+0.27/+0.91 pct year on year, respectively, and Q3 financial expenses were 3.11 billion billion yuan, which eroded profits a lot. Mainly due to high pressure on cash flow, interest-bearing liabilities increased by 100.6 billion yuan year on year. 9M24 impairment expenses accounted for 0.35% of revenue, -0.13pct yoy, Q3 -0.55pct yoy to 0.17%. 9M24's net profit margin was 2.07%, -0.34pct year-on-year, 1.57% in 24Q3, and -0.61/-0.87pct month-on-month.
Payment pressure is increasing, cash flow is under pressure, and leverage ratios are passively rising
9M24's net operating cash flow was -89 billion yuan, with a year-on-year increase of 45.8 billion yuan, with payment/payout ratios of 101%/111% year-on-year, and -3.4/+1.1pct, of which 24Q3 net amount was -7.3 billion yuan, with a year-on-year decrease of 16.5 billion yuan, a decrease of 27.7 billion yuan month-on-month, and a quarterly revenue/payment ratio of 110%/112%, respectively. -2.3/-14.6pct, month-on-month +24.0/+ 11.6pct. The balance ratio at the end of 24Q3 was 76.8%, +1.24pct year over year; the interest-bearing debt ratio was 28.1%, +6.62pct year over year.
Vigorously expanding the water conservancy and water transportation business showed results. Housing construction orders in the traditional sector performed well. 9M24 signed 1.47 new contracts, -17.5% compared to the same period, of which 327.8 billion new contracts were signed in 24Q3, or -12.7% compared to the same period last year. Among them, 9M24 railway/highway/urban rail/housing construction/municipal and power engineering were -6%/-59%/-2%/-18%/-29%/-9%, and mining/water conservancy and water transportation new contracts were +308%/+39% year-on-year. By region, 1368.1/105.3 billion were newly signed domestic/overseas, -18.0%/-10.1% compared with the same period last year.
Profit forecasting and valuation
Considering that the company's operating cash flow is under pressure and the increase in the size of interest-bearing liabilities has caused significant increases in financial expenses to erode profits, we adjusted the company's net profit forecast for 2024-2026 to 23.7/22.4/21.3 billion yuan (previous value 24.1/23.1/22.4 billion yuan). Comparable to A Shares/H Shares, the company's 25-year Wind had a consistent expected average of 6/3xPE. Considering that the company's 23-year dividend rate and 25-year predicted dividend rate were both higher than the comparable average, approval was granted to give the company 7/4xPE for A/H shares and adjusted the target price for A/H shares to HK$11.54/7.19 (previous value: HK$8.89/HK$5.84), all maintaining a “buy” rating.
Risk warning: The growth rate of infrastructure investment is slowing down, real estate recovery is lower than expected, and the increase in gross margin falls short of expectations.
