CRSC(688009) 长江证券·2024-05-21 05:01Investment Rating - The investment rating for the company is "Buy" and is maintained [4]. Core Views - The company's profitability has further improved, with a gross profit margin of 27.41% in Q1 2024, an increase of 4.73 percentage points year-on-year [5]. - New contracts in the railway sector reached 3.985 billion yuan in Q1 2024, marking a 10.13% increase compared to the same period last year, the highest in five years [5]. - There is a growing demand for upgrades and replacements, with the company expected to see an increase in the proportion of renewal orders from 30% to over 40% in the railway market over the next 3-5 years [5]. - The company has a robust order backlog of 168.831 billion yuan as of the end of 2023, providing strong revenue support for the next 2-3 years [6]. - The company is expanding its overseas business, with new orders increasing by 45% year-on-year in 2023, leveraging the "Belt and Road" initiative [6]. - The forecasted net profits for 2024 and 2025 are 3.95 billion yuan and 4.50 billion yuan, respectively, with corresponding price-to-earnings ratios of 15.4 and 13.5 [6]. Summary by Sections Financial Performance - In Q1 2024, the company reported revenues of 6.547 billion yuan, a decrease of 12.74% year-on-year, and a net profit of 604 million yuan, down 10.84% year-on-year [5]. - The sales net profit margin improved to 10.95%, an increase of 0.58 percentage points year-on-year [5]. Market Opportunities - The railway market is witnessing a release of orders, with a significant increase in new contracts, indicating a recovery in demand [5]. - The company holds approximately 40% of the market share in urban rail transit control systems, participating in over 40 cities [5]. Future Outlook - The company is expected to benefit from the increasing demand for equipment upgrades and replacements, with a faster delivery and acceptance cycle for renewal projects [5]. - The overseas business is anticipated to contribute significantly to revenue growth, with a focus on both renovation and new construction projects [6].