CHINA CRSC(03969.HK):REVENUE AND PROFIT BOTH DECLINED IN 2023 BUT WE REMAIN OPTIMISTIC ON THE COMPANY'S PERFORMANCE IN 2024
CHINA CRSC(03969.HK):REVENUE AND PROFIT BOTH DECLINED IN 2023 BUT WE REMAIN OPTIMISTIC ON THE COMPANY'S PERFORMANCE IN 2024
China CRSC's (the "Company") 2023 preliminary results were generally in-line with our previous expectations. The Company achieved total revenue of RMB37,140 million in 2023, representing a decrease of 7.7% YoY, slightly better than our previous expectations. However, its net profit attributable to owners of the company is RMB3,468 million, representing a decrease of 4.6% YoY, missing our previous expectations. Our current TP is HK$ 3.70 and our current Company rating is "Buy". We will adjust the target price based on the details of the Company's annual report but maintain the current rating as we believe the Company's prospects in 2024 are positive.
The Company's newly-signed orders increased, which may boost its performance in 2024. In the first nine months of 2023, the aggregate value of newly-signed orders of the Company amounted to RMB50.88 bn, representing an increase of 12.01% YoY. The Company's order cycle is about three years, and 97% of the newly-signed orders will be recognized as revenue within two years. Therefore, the increase in newly-signed orders in 2023 may ensure revenue growth for the Company in the next two years. We expect that the strong growth of new orders in 2023 will be reflected in revenue growth in 2024 and 2025.
We believe that the Company's rail sector will further improve in 2024. China's railway passenger traffic has recovered significantly since 2023, which may increase the demand in rail transit sector. Besides, on 23 February 2024, China's government announced to encourage a new round of equipment upgrading to boost the economy, which may stimulate upgrading demand of railway equipment. As the Company's railway sector revenue accounts for nearly half of the Company's total revenue, we believe that the increasing demand of railway equipment may improve the Company's overall performance. Therefore, we are optimistic on the Company's prospects in 2024.
Risks: Intensified competition in the industry; insufficient overseas demand; orders may not be fully converted into revenue.
China CRSC's (the "Company") 2023 preliminary results were generally in-line with our previous expectations. The Company achieved total revenue of RMB37,140 million in 2023, representing a decrease of 7.7% YoY, slightly better than our previous expectations. However, its net profit attributable to owners of the company is RMB3,468 million, representing a decrease of 4.6% YoY, missing our previous expectations. Our current TP is HK$ 3.70 and our current Company rating is "Buy". We will adjust the target price based on the details of the Company's annual report but maintain the current rating as we believe the Company's prospects in 2024 are positive.
中國CRSC（“公司”）2023年初步業績總體上符合我們先前的預期。該公司在2023年實現總收入爲人民幣371.4億元，同比下降7.7％，略好於我們之前的預期。但是，其歸屬於公司所有者的淨利潤爲人民幣34.68億元，同比下降4.6％，未達到我們先前的預期。我們目前的目標價爲3.70港元，我們目前的公司評級爲 “買入”。我們將根據公司年度報告的細節調整目標價格，但維持目前的評級，因爲我們認爲公司在2024年的前景樂觀。
The Company's newly-signed orders increased, which may boost its performance in 2024. In the first nine months of 2023, the aggregate value of newly-signed orders of the Company amounted to RMB50.88 bn, representing an increase of 12.01% YoY. The Company's order cycle is about three years, and 97% of the newly-signed orders will be recognized as revenue within two years. Therefore, the increase in newly-signed orders in 2023 may ensure revenue growth for the Company in the next two years. We expect that the strong growth of new orders in 2023 will be reflected in revenue growth in 2024 and 2025.
該公司新簽署的訂單有所增加，這可能會提振其在2024年的業績。在2023年前九個月，公司新簽署的訂單總額爲人民幣508.8億元，同比增長12.01％。該公司的訂單週期約爲三年，新簽署的訂單中有97％將在兩年內確認爲收入。因此，2023年新簽署的訂單的增加可能會確保公司未來兩年的收入增長。我們預計，2023年新訂單的強勁增長將反映在2024年和2025年的收入增長上。
We believe that the Company's rail sector will further improve in 2024. China's railway passenger traffic has recovered significantly since 2023, which may increase the demand in rail transit sector. Besides, on 23 February 2024, China's government announced to encourage a new round of equipment upgrading to boost the economy, which may stimulate upgrading demand of railway equipment. As the Company's railway sector revenue accounts for nearly half of the Company's total revenue, we believe that the increasing demand of railway equipment may improve the Company's overall performance. Therefore, we are optimistic on the Company's prospects in 2024.
我們認爲，該公司的鐵路行業將在2024年進一步改善。自2023年以來，中國的鐵路客運量已顯著恢復，這可能會增加軌道交通領域的需求。此外，2024年2月23日，中國政府宣佈鼓勵新一輪設備升級以提振經濟，這可能會刺激鐵路設備的升級需求。由於該公司的鐵路部門收入佔公司總收入的近一半，我們認爲鐵路設備需求的增加可能會改善公司的整體業績。因此，我們對公司2024年的前景持樂觀態度。
Risks: Intensified competition in the industry; insufficient overseas demand; orders may not be fully converted into revenue.
風險：行業競爭加劇；海外需求不足；訂單可能無法完全轉化爲收入。
譯文內容由第三人軟體翻譯。
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