China Railway Construction (601186) 2019 Third Quarterly Report Review: Steady Performance, Faster Orders, Significant Improvement in Cash Flow

China Railway Construction (601186) 2019 Third Quarterly Report Review: Steady Performance, Faster Orders, Significant Improvement in Cash Flow

Event: China Railway 杭州桑拿网 Construction released the third quarter report of 2019: the company’s 19Q1-19Q3 total revenue reached 5613.

5.7 billion, +14 per year.

59%, net profit attributable to mother / non-net deduction is 146 each.

89 billion / 136.

36 yuan, +16 per year.

15% / 13.

16%, net operating cash flow -199.

4.2 billion, suffering 276 less each year.

9.7 billion yuan.

  Comment: The performance is stable and in line with expectations, and the revenue growth rate has been at a high level in recent years: the company’s 19Q1-Q3 achieved revenue of 5,613.

5.7 billion, +14 per year.

59%, net profit attributable to mother / non-net deduction is 146 each.

89 billion / 136.

36 yuan, +16 per year.

15% / 13.

16%, the net profit growth rate after deduction is slightly replaced, mainly due to the issuance of convertible bonds in 青岛夜网 this period to the increase in fair value gains +5.

8.2 billion to 4.

5.4 billion.

By quarter, 19Q1-Q3 revenue growth in advance was +19 each.

32%, +10.

44%, +15.

22%, the growth rate of net profit attributable to mothers for each of the ten years is 13.

56%, 17.

69%, 16.

54%, third-quarter revenue accelerated, and performance maintained steady growth.

The company still achieved double-digit growth in revenue and net profit in the context of the macroeconomic downturn. The continuous growth rate has been at a high level in recent years, the transformation of counter-cyclical adjustment has increased, and the construction of a strong transportation country has advanced.Come high growth.

The strong transportation nation favors the leading infrastructure companies, and Q3 orders have accelerated significantly: 19Q1-Q3 companies gradually expand new orders 11152.

3.4 billion, achieving annual plan 67.

18%, +25.

07%, a gradual increase of 7 from the earlier Q2.

07 pp, an increase of 25 pp over the same period last year.

By quarter, 19Q1-Q3 is +6 per quarter.

30% / + 27.

99% / + 40.

30%, Q3 orders significantly accelerated.

In terms of business, engineering contract orders have grown strongly, with a total of 9,518 new contracts signed.

9.3 billion, +30 a year.

30%, of which railway orders are +14 each time.78%, highway orders significantly accelerated, +26 in ten years.

70%, an increase of 25% over Q2.

91 pp.

We believe that the rapid growth of engineering contract orders is mainly due to favorable policies and the acceleration of multi-regional transportation construction across the country.

In non-engineering contracting business, survey and design, real estate development and logistics business are every -25.

83% / + 5.

26% / + 5.

64%, an increase of 9% over Q2.

0, 8.

16, 5.

01 pp; industrial manufacturing continues to expand, transitioning for ten years.

90%.

In terms of regions, the number of new years in the country is 10,165.

8.7 billion, +24 per year.

71%, new chronic single overseas 986.

4.8 billion yuan, +28 a year.

97%, domestic and overseas orders increased simultaneously.

The gross profit margin rate improved, and cash flow improved significantly: the company’s comprehensive gross profit margin for the first three quarters of 2019 was 9.

76%, -0 per year.

23 pp, we think it may be due to the increase in the proportion of engineering contracts included in the gross profit.

  The period rate is 5.

62%, a decrease of 0 compared with the same period last year.

22 pp, broken down by item, the sales rate / management rate / finance rate are each 0.

61% / 4.

45% / 0.

56%, ten years +0.

01 / -0.

09 / -0.

14 pp.

Net operating cash flow -199.

4.2 billion, suffering 276 less each year.

9.7 billion yuan, Q3 net inflow in a single quarter of 125.

300 million US dollars, the cash flow situation has improved significantly, we think it is mainly due to the increase in cash received from sales of goods / labor services.

Asset-liability ratio 78.

43%, ten years +0.

71 pp, mainly due to the company’s increased long-term funding needs, long-term borrowings +34.

42% to 938.

8.2 billion.

Earnings forecast and rating: We maintain our company’s EPS forecast for 2019-2021.

51, 1.68, 1.

85 yuan, calculated PE is 6x, 6x, 5x.

Infrastructure continued to recover, benefiting from gradual investment, the company’s single-quarter order growth rate reached a new high in recent years, and overlapping orders ensured stable growth in the next few years; we believe that infrastructure recovery and high order growth have brought expected repairThe target PE for 2020 is 8 times, and the target price is maintained at 13.

2 yuan, maintaining the “strong push” level.

  Risk reminder: The macro economy fails to meet expectations, the infrastructure growth rate does not meet expectations, and the project advancement fails to meet expectations.