多板块经营承压，装备制造业务毛利率有所提升：24 年1-9 月公司多板块经营承压，毛利率小幅下行。销售毛利率/净利率分别达8.8%/2.7%，同比下降0.29/0.24pct。分板块看，基建业务为公司主要收入来源，24 年1-9 月，基建业务实现收入7131.9 亿元，收入占比达87%，同比下降7.7%，毛利率为7.6%，同比-0.41pct。24 年1-9 月公司房地产开发/装备制造/设计咨询及资源利用分别实现收入219.1/198.4/128.5/57.6 亿元，同比下降13.2%/1.1%/4.1%/11.1%，毛利率分别为12.7%/22.7%/24.5%/54.3%，同比-0.32/+1.18/-2.67/-4.05pcts。Incidents:
China Railway released its 2024 three-quarter report. From January to September '24, the company achieved revenue, net profit to mother, and net profit after deducting non-net profit of 820.28/20.57/19.01 billion yuan, respectively, a year-on-year decrease of 7.3%/14.3%/15.9%. The 24Q3 company achieved revenue/net profit/net profit after deducting non-net profit of 275.76/6.29/5.92 billion yuan respectively, a year-on-year decrease of 6.1%/19.1%/19.7%.
Comment:
Multi-sector operations were under pressure, and the gross margin of the equipment manufacturing business increased: from January to September '24, the company's multi-sector operations were under pressure, and gross margin declined slightly. Gross sales margin/net margin reached 8.8%/2.7%, respectively, down 0.29/0.24pct year-on-year. By sector, the infrastructure business is the company's main source of revenue. From January to September '24, the infrastructure business achieved revenue of 713.19 billion yuan, accounting for 87% of revenue, down 7.7% year on year, gross margin of 7.6%, and -0.41 pct year on year. From January to September '24, the company's real estate development/equipment manufacturing/design consulting and resource utilization achieved revenue of 219.1/19.84/12.85/5.76 billion yuan, a year-on-year decrease of 13.2%/1.1%/4.1%/11.1%. The gross margin was 12.7%/22.7%/24.5%/54.3%, respectively, -0.32/+1.18/-2.67/-4.05 pcts.
Expense rate management is good. Cash flow improved year on year in the third quarter: the company's expense ratio control was relatively good from January to September '24, with sales, management, finance, and R&D expenses rates of 0.5%/2.2%/0.4%/2.0%, respectively, +0.03/+0.04/-0.05pct. The net cash outflow from the company's operating activities from January to September '24 was 71.26 billion yuan, an increase of 42.47 billion yuan over the same period last year. The company's operating cash flow improved in the third quarter. The net cash outflow from operating activities was 1.93 billion yuan, which was 1.83 billion yuan less than the same period last year.
New contracts declined year on year, and resource utilization and new business signing remained high: as of the end of September 2024, the company signed new contracts of 1527.86 billion yuan, a year-on-year decrease of 15.2%; new domestic/overseas contracts were 1404.63/123.23 billion yuan, a year-on-year decrease of 16.1%/3.2%; the amount of unfinished contracts was 6325.26 billion yuan, an increase of 7.6% over the end of 23. The amount of new contracts signed for construction in the first three quarters was $1085.73 billion, down 19.2% year on year; new contracts for resource utilization and emerging businesses were $20.83/211.05 billion, up 22%/23.4% year on year; among emerging businesses, new contracts for water conservancy and hydropower/ clean energy/ urban operation were 60.3/47/10.3 billion yuan, up 106.2%/52.4%/93.8% year on year. The fourth quarter is the traditional peak repayment season for construction companies. Combined with the promotion of debt, the company's cash flow is expected to continue to improve.
Profit forecasting, valuation and ratings: Company operations continue to be under pressure due to tight local finances and downturn in real estate. We lowered our 24-26 net profit forecast to 30.2/31.5/33 billion yuan (down 18%, 21%, and 23%, respectively). The company had sufficient contracts in hand, high growth in emerging business orders, and maintained the “buy” rating for A/H shares.
Risk warning: Performance growth falls short of expectations, macroeconomic downside risks, gross margin growth falls short of expectations.
