CRRC(01766) 国泰君安·2024-03-27 16:00Investment Rating - The report assigns a rating of "Buy" for the company [2]. Core Views - The company is a global leader in rail transit equipment, and the "Large-scale Equipment Update Plan" is expected to accelerate industry construction and updates, leading to improved profitability [4]. - The forecast for net profit attributable to shareholders for 2023-2025 is RMB 12.21 billion, RMB 13.72 billion, and RMB 15.24 billion, respectively, with corresponding EPS of RMB 0.43, RMB 0.48, and RMB 0.53 [4][10]. - The target price is set at RMB 6.99, equivalent to HKD 7.59, based on a comprehensive consideration of PE and PB valuations [4][11]. Summary by Sections 1. Investment Recommendations - The company is expected to benefit significantly from the "Large-scale Equipment Update Plan," which will drive industry growth and enhance profitability [4]. - The railway equipment business is projected to see revenue growth rates of 9.5% for 2023 and 2024, and 10.5% for 2025, with stable gross margins [7]. 2. Focus on Rail Transit Equipment and Core Technologies - The company has a strong position in the rail transit equipment sector, focusing on core technologies and maintaining a leading global status [16][17]. - The recovery in the rail transit industry is anticipated to boost performance, with significant demand expected to be released [22]. 3. Policy Support for Industry Development - Multiple favorable policies have emerged to support the rail transit industry, focusing on enhancing the railway's share of transportation and promoting green transformation [29]. - The government aims to increase the electrification rate and accelerate the replacement of old locomotives, which will benefit the company [30]. 4. Railway Demand and Investment - The railway passenger volume has significantly recovered, with a 130% year-on-year increase in 2023, surpassing pre-pandemic levels [32]. - The railway freight volume is expected to remain stable, with a projected total of 50.1 billion tons in 2023 [33]. 5. Financial Summary - The company's revenue for 2023 is expected to be RMB 240.57 billion, with a growth rate of 7.91%, and net profit is projected to be RMB 12.21 billion [5][10]. - The financial metrics indicate a stable cost structure, with a slight increase in various expense ratios [24].