CHINA RAILWAY(601390) 国投证券·2024-09-11 00:00Investment Rating - The investment rating for the company is "Buy-A" with a target price of 6.25 CNY for the next six months [3][6]. Core Views - The company's revenue for H1 2024 was 544.52 billion CNY, a year-over-year decrease of 7.83%, with a net profit of 14.28 billion CNY, down 12.08% year-over-year [1][6]. - The infrastructure business is under pressure, while emerging businesses are growing rapidly, and overseas business gross margins are improving [1][2]. - The company has signed new contracts worth 166.33 billion CNY in emerging businesses, a 32.1% increase year-over-year, indicating potential for future profit contributions [2]. Summary by Sections Financial Performance - In H1 2024, the company achieved a revenue of 544.52 billion CNY, with a year-over-year decline of 7.83%. The net profit was 14.28 billion CNY, down 12.08% year-over-year [1]. - The gross margin for H1 2024 was 9.00%, a slight decrease of 0.03 percentage points year-over-year. The overseas business gross margin improved significantly to 7.33%, an increase of 2.35 percentage points year-over-year [1][6]. Business Segments - The infrastructure construction business saw a revenue decline of 6.76% year-over-year, primarily due to significant drops in road and municipal business revenues, which fell by 9.82% and 7.97% respectively [1]. - Emerging business segments, including water conservancy, clean energy, and ecological protection, have shown strong growth, with new contracts increasing by 32.1% year-over-year [2]. Future Outlook - The company has revised its revenue forecasts for 2024-2026, expecting revenues of 1,203.84 billion CNY, 1,288.11 billion CNY, and 1,365.39 billion CNY, with respective year-over-year growth rates of 4.7%, 7.0%, and 6.0% [6][7]. - The net profit forecasts for the same period are 30.90 billion CNY, 33.16 billion CNY, and 35.31 billion CNY, with expected year-over-year growth rates of -7.7%, 7.3%, and 6.5% [6][7].