CNECC(601611) 华源证券·2024-08-29 02:00Investment Rating - Buy (Maintained) [3] Core Views - The company's non-GAAP net profit exceeded expectations, driven by strong performance in the nuclear power sector, which is expected to continue growing [3] - The company's nuclear power engineering revenue grew significantly, with a 30.22% YoY increase in H1 2024, contributing 27.6% of total revenue, up from 22.1% at the end of 2023 [3] - The company's new contract signings in H1 2024 reached RMB 76.637 billion, a 17.07% YoY increase, with July alone seeing a 89.65% YoY increase in new contracts [3] - The company's R&D expenses increased, reflecting its focus on technological innovation, particularly in the nuclear power sector [4] - The company's nuclear power business is expected to accelerate in H2 2024, with peak revenue potentially reaching RMB 60-80 billion, driven by higher net margins compared to traditional businesses [4] Financial Performance - In H1 2024, the company reported revenue of RMB 54.627 billion, a 0.10% YoY increase, with net profit attributable to shareholders of RMB 955 million, up 6.88% YoY [3] - Non-GAAP net profit attributable to shareholders in H1 2024 was RMB 1.033 billion, a 20.59% YoY increase, with Q2 non-GAAP net profit up 38.26% YoY [3] - The company's gross margin for nuclear power engineering was 12.42%, while industrial and civil engineering saw a 16.95% YoY decline in revenue, with a gross margin of 7.69% [3] - The company's operating cash flow in H1 2024 was RMB -12.901 billion, slightly improved by RMB 186 million YoY [4] Profit Forecast and Valuation - The company's net profit attributable to shareholders is forecasted to be RMB 2.430 billion, RMB 3.057 billion, and RMB 3.966 billion for 2024E, 2025E, and 2026E, respectively, with YoY growth rates of 18%, 26%, and 30% [4] - Excluding credit impairment, the company's net profit attributable to shareholders is expected to be RMB 4.531 billion, RMB 5.546 billion, and RMB 6.219 billion for 2024E, 2025E, and 2026E, respectively, with YoY growth rates of 72%, 22%, and 12% [4] - The company's current PE ratios are 10x, 8x, and 6x for 2024E, 2025E, and 2026E, respectively [4] Industry and Market Position - The company is the only enterprise globally with over 30 years of continuous experience in nuclear power construction, having built the majority of nuclear power units and nuclear island projects in China [4] - The company's new contract signings in H1 2024 ranked first among central state-owned construction enterprises, with a 17.07% YoY increase [3]