China Railway Construction (601186) 2019 Interim Report Review: Steady Performance, Plenty of Cash Flow, Significant Improvement

Matters: China Railway Construction released 19H1 Interim Report: The company achieved revenue of 3529 in the first half of 2019.

35 trillion, ten years +14.

23%, net profit attributable to mother is 92.

84 trillion, +15 for ten years.

93%, net operating cash flow -324.

7.2 billion, a decrease of 134 per year.

1.6 billion.

  Comment: Q2 performance accelerated slightly, construction contracting grew steadily: 19H1 revenue was longer +14.

23% to 3529.

3.5 billion, net profit attributable 重庆耍耍网 to mother 92.

84 trillion, +15 for ten years.

93%.

By quarter, 19Q1 / Q2 achieved revenue of 1570.

89 billion / 1958.

46 trillion, ten years +19.

32% / + 10.

44%, net profit to mother each 38.

8.6 billion / 53.

980,000 yuan, ten years +13.

56% / + 17.

68%, Q2 performance slightly accelerated.

In terms of different business types, the main business project contracting grew steadily, +16 per year.

39% to 3109.

69 ppm, survey and design, industrial manufacturing, real estate development, logistics supplies and other income 76.

84 billion / 89.

8.7 billion / 98.

35 billion / 344.

0.2 million yuan, ten years +9.

37% / + 21.

48% /-0.

78% / + 8.

78%, only real estate development income decreased, we think it may be affected by the housing market intervention; by region, domestic revenue was 3371.

25 trillion, +15 for ten years.

74%, overseas revenue decreased, ten years -10.

64% to 158.

100,000 yuan.

Enormous orders escorted the growth of performance, and the growth rate of housing construction / urban rails increased through the whole: the new contract signed in 19H1 was 7186.

97 ppm, +18 a year.01%, reaching 43 of the annual plan.

30%; contract not completed 29421.

65 trillion, +12 for ten years.

59%.

  In terms of business, 6118 was newly signed for project contracting.

92 ppm, an increase of 23 in ten years.

14%.

Among them, the growth rate of housing construction and urban rail transit increased through 60% each.

62% / 27.

53% to 1910.

25 billion / 658.

7.1 billion US dollars, we believe that the increase is mainly due to the increase in urban rail approval, as well as the company’s expansion of shantytowns, urban and rural old quarters, and reconstruction efforts; railways, highways, and municipalities newly signed contracts 981.

03 billion / 1165.

10 billion / 996.

3.3 billion, previously +18.

58% / + 0.

79% / + 14.

32%, highway growth rate is small; in non-engineering contract orders, survey and design 77.

76 trillion, -34.

83%; industrial manufacturing 98.

540,000 yuan, at least -6.

89%; logistics supplies 432.

94 ppm, ten years + 0.

63%; real estate 398.

320,000 yuan, at least -2.

90%, except for survey and design, other fluctuations are small.

By region, the number of new domestic contracts was 6,460.

2.41 million yuan, ten years + 19.

59%; newly signed overseas contracts 726.

73.2 billion, previously +5.

55%.

Gross margin slightly increased to 9.

80%, cash flow improved significantly: 1) Gross profit margin for 19H1 was 9.

80%, +0 compared to the same period last year.

1 pp; by business, real estate development exceeds +5.

76 pages to 28.

44%, we judge that it is mainly due to the increase in higher gross profit appropriation; the gross profit level of the remaining businesses has extended to decline, and engineering contracting, survey and design consulting, and industrial manufacturing gross profit margins have each been 7.

61% / 31.

95% / 22.

94%, each drop by 0.09/1.

77/0.

93 pages; 2) Period expenses 5.

53%, a decrease of 0 compared with the same period last year.

10 pp, of which the sales rate dropped by 0.

03 pp to 0.

61%, the financial rate dropped by 0.

08 pp to 0.

59%, the management fee rate dropped by 0.

21 pp to 2.

34%, R & D expense increased by 0.

22 pp to 1.

98%; 3) Net operating cash flow -324.

72 trillion, 134 less once a year.

160,000 yuan, mainly due to an increase of 324 in cash received for sales of goods / labor services.

4.5 billion to 3491.

17 trillion.

Earnings forecast and rating: We expect the company’s EPS to be 1 in 2019-2021.

51, 1.

68, 1.

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

We believe that sufficient orders in hand can maintain sustained and steady growth, giving the company a target assessment of 7 times and a target price of 10.

5 yuan.

The first coverage was given 厦门夜网 a “Recommended” rating.

  Risk reminder: The macro economy fails to meet expectations, infrastructure growth rate does not meet expectations, and real estate restructuring exceeds expectations.