Sinoma-int(600970) EBSCN·2024-10-29 00:11Investment Rating - The report maintains a "Buy" rating for the company [4][6]. Core Views - The company has shown steady revenue growth with a positive turnaround in new contract signing rates, particularly in operation and maintenance services [2][3][4]. - The company is expected to benefit from increasing carbon and environmental regulations, which may drive further order growth [4]. - The company has committed to enhancing shareholder returns through a plan to increase dividend payouts over the next three years [4]. Financial Performance - For the first nine months of 2024, the company achieved revenues of 31.7 billion yuan, a year-on-year increase of 0.7%, and a net profit attributable to shareholders of 2.1 billion yuan, up 2.9% [1][2]. - The gross profit margin for the same period was 18.9%, reflecting a slight increase, while the net profit margin was 6.9%, showing a minor decrease [2]. - The company reported a net cash outflow from operating activities of 260 million yuan, which is a significant increase compared to the previous year [2]. Contract Signing and Order Growth - In Q3 2024, the company signed new contracts worth 15.7 billion yuan, with a year-on-year growth of 35%, indicating a recovery in contract signing rates [3]. - The new contract structure is improving, with operation and maintenance contracts accounting for 25% of total new contracts, and significant growth in mining and cement operation contracts [3][4]. - The company’s new domestic and international orders for the first nine months were 22.58 billion yuan and 30.2 billion yuan, respectively, with a year-on-year decrease of 5% and an increase of 6% [3]. Profit Forecast and Valuation - The report has adjusted the profit forecast for the company, lowering the net profit estimates for 2024-2026 to 3.16 billion yuan, 3.36 billion yuan, and 3.69 billion yuan, respectively [4]. - Despite the challenges in the cement industry, the company’s new order growth and rapid expansion in operation services are expected to improve its business structure [4].