Sinoma-int(600970)2024-09-02 00:03Investment Rating - The report maintains a "Buy" rating for the company with a target price of 14.9 CNY, based on a 12x PE for 2024 [6]. Core Viewpoints - The company is positioned as a leader in the cement engineering industry with a strong focus on overseas expansion and a diversified business model that includes engineering, equipment manufacturing, and operational services. The increase in dividend payout ratio enhances its long-term investment appeal [1][21]. - The operational service segment shows robust growth, with a 22% increase in revenue and a 41% rise in new orders in the first half of 2024, indicating a strong market demand for mining and cement operational services [2][27]. - The establishment of the Equipment Group through resource integration is expected to enhance market share in the equipment sector, which has significant growth potential [3]. Summary by Sections 1. Cement Engineering and Dividend Policy - The company is the world's leading contractor in cement engineering services, with a market share that has remained at the top for 16 consecutive years. It aims to achieve a balanced business structure by focusing on engineering, equipment, and operational services [12][13]. - The company plans to distribute cash dividends of at least 44%, 48.40%, and 53.24% of the distributable profits for the years 2024 to 2026, respectively, with projected dividend yields of 5.18%, 6.33%, and 7.78% [1][21]. 2. Operational Services Growth - The operational services segment, which includes mining and cement production line services, has shown significant growth, with revenues reaching 56.73 billion CNY in the first half of 2024, a 22.22% increase year-on-year [27]. - The mining operational services are particularly promising, with a 47% increase in new orders, indicating strong demand driven by stricter environmental policies [30]. 3. Equipment Group Development - The company has restructured to form the Equipment Group, which is expected to capture a larger share of the global cement equipment market, projected to reach 350-400 billion CNY by 2025 [3]. - The Equipment Group's revenue from overseas operations has increased significantly, indicating successful international expansion efforts [3]. 4. International Expansion Strategy - The company has made strategic investments in overseas markets, with a 15.2% increase in revenue from international operations in the first half of 2024. The Middle East and Africa are key focus areas for new orders [4]. - The company aims to leverage its international presence to tap into the projected 200-250 billion CNY annual market for overseas cement EPC projects by 2025 [4].