Event: The company released its 2024 semi-annual report. In the first half of 2024, the company achieved revenue of 516.137 billion yuan, a year-on-year decrease of 4.61%; net profit to mother was 11.902 billion yuan, a year-on-year decrease of 12.8%.

Real estate development business revenue is growing at a high rate. 2024H1, the company achieved revenue of 516.137 billion yuan, a year-on-year decrease of 4.61%; among them, engineering contracting revenue was 451.615 billion yuan, down 6.58%; planning and design consulting revenue was 8.002 billion yuan, down 4.57%; industrial manufacturing revenue was 11.233 billion yuan, down 4.57%; real estate development revenue was 31.548 billion yuan, up 47.34% year on year; material logistics and other business Revenue was 42.165 billion yuan, down 6.81% year over year. Internal offset of $28.426 billion. The company achieved net profit of 11.902 billion yuan, a decrease of 12.8%; deducted non-net profit of 11.151 billion yuan, a decrease of 13.54%. The company achieved a net cash flow of 81.676 billion yuan from operating activities, an increase of 62.333 billion yuan over the previous year, mainly due to a decrease in cash received from sales of goods and provision of services during the reporting period.

The gross margin and period expense ratio have increased. 2024H1's gross margin was 9.12%, up 0.21pct year on year; net margin was 2.9%, down 0.15pct year on year. The cost rate for the period was 4.8%, an increase of 0.41pct over the previous year. The sales expense ratio was 0.57%, a year-on-year decrease of 0.04pct. The management fee rate was 1.98%, an increase of 0.03pct over the previous year. The financial expense ratio was 0.57%, up 0.27pct year over year. The R&D cost rate was 1.67%, an increase of 0.14pct over the previous year. The company's balance ratio was 76.28%, an increase of 0.6 pct over the previous year.

There are plenty of contracts in hand, and the number of new contracts signed for mining, water conservancy, and water transportation is growing rapidly. With 2024H1, the company signed a total of 11.0.6217 billion yuan of new contracts, a year-on-year decrease of 19.02%. New orders for housing construction projects were 426.2785 billion yuan, down 14.44% year on year; new contracts for municipal engineering were 105.6251 billion yuan, down 34.74% year on year; new contracts signed for railway engineering were 78.4615 billion yuan, down 26.73% year on year; new contracts signed for highway engineering were 72.2703 billion yuan, down 60.58% year on year; new contracts for mining mining were 69.77 billion yuan, up 413.79% year on year; new contracts signed for water conservancy and water transportation projects The contract was $54.6288 billion, up 39.68% year over year. The company's domestic business signed a new contract of 10.28.1,495 billion yuan, a year-on-year decrease of 19.45%; the overseas business signed a new contract of 72.4722 billion yuan, a year-on-year decrease of 12.32%. As of June 30, 2024, the Group's total outstanding contract amount was 71,23.0623 billion yuan, an increase of 6.48% over the end of the previous year, and the company's future performance is guaranteed.

Investment advice: The company's net profit for 2024-2026 is estimated to be 26.501, 29.277, and 32.079 billion yuan, respectively, +1.55%/+10.48%/+9.57%, respectively. The corresponding P/E is 4.36/3.94/3.60x, respectively, maintaining the “recommended” rating.

Risk warning: risk of falling fixed asset investment; risk of new orders falling short of expectations; risk of accounts receivable recovery falling short of expectations.