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China Railway Construction (601186) In-Depth Report: Infrastructure Leader in Transportation Powers Set Off Again

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China Railway Construction (601186) In-Depth Report: Infrastructure Leader in Transportation Powers Set Off Again

The company has a solid performance, and the leading transportation company is one of the largest infrastructure construction groups. Its main business is engineering contracting in the fields of railways, highways, municipalities, etc. It owns world-leading technological advantages in the design and construction areas such as plateaus and alpine areas.

From the company’s listing in 2008 to this year, the compound growth rate of revenue was 12%, and the compound growth rate of net profit attributable to mothers was 17%. In the first half of 2019, the company realized revenue of 352.9 billion yuan, an increase of 14%, and achieved net profit of 92%.

8.4 billion, a year-on-year growth of 16%, and revenue accelerated again.

Financing channels expanded, infrastructure investment bottomed out and the growth rate of infrastructure investment from January to August 2019 was 3.

19%, an increase of 1.
.

4pct, a month-on-month increase of 0 in August.

28 points.

The expected increase in investment expectations this year is due to deleveraging and other factors that have led to insufficient investment momentum and slower capital availability.

The downward pressure on the economy has intensified, and infrastructure is expected to play a supporting role. From January to August this year, the investment in railway transportation and road transportation increased by 12 respectively.

7% and 7.

7%.

The State Council of the People’s Republic of China issued a document this year that special bonds can be used as major project capital to promote the expansion of financing channels. The State Council also pointed out that it is necessary to speed up the issuance and use of special bonds and expand the scope of use. It is expected to drive 7% to 8% of infrastructure investment next yearThe growth rate, transportation infrastructure leaders are expected to fully benefit.

Enormous orders guarantee performance, and diversified businesses have developed vitality. In the past three years, the company’s single-year CAGR reached 19%, of which the new income in the first half of 2019 was US $ 718.7 billion, an increase of 18%, and continued to maintain high growth. The balance of orders in hand exceeded 2 trillion.The revenue protection ratio was over 4 times, and the market share reached nearly 6%, a record high.

The Sichuan-Tibet Railway and other major projects were promoted, and the company’s performance promoted the accelerated release.

The proportion of railway business in the engineering contracting segment increased, and the gross profit margin increased overall.

Real estate, survey and design, industrial manufacturing, logistics trade and other diversified businesses contribute nearly half of the company’s 佛山桑拿网 net profit and strong profitability.
.

Investment and financing projects such as BOT and PPP have gradually entered the operating period, and profitability and cash flow are expected to improve; the proportion of revenue from franchising and operation will gradually increase, and the company is expected to promote improvement in the future.

Investment suggestion: Underestimate the leader and maintain the “Buy” rating. Transportation investment has continued to grow rapidly this year, and the company has ample orders in hand. We maintain our profit forecast for the company. It is expected that the EPS in 19-21 will be 1.

52/1.

69/1.

86 yuan, the current sustainable corresponding PE is 6 respectively.

5/5.

9/5.

4 times.

Due to the company’s industry partiality and the implementation of the strategy of a strong transportation country, we believe that the reasonable division of the company should be 8-9 times PE, a reasonable estimate of 12.

16-13.

68 yuan, maintain “Buy” rating.

Risk warning: bad debts of accounts receivable, preliminary investment in infrastructure, overseas projects are less than expected, etc.