中国铁建20241128

Key Points Summary Industry and Company - Company: China Railway Group Limited (CRG) - Industry: Construction and Infrastructure Core Views and Arguments - Strategic Focus: CRG is focusing on consolidating and upgrading the construction industry while fostering the development of emerging industries. This includes new infrastructure, new equipment, new materials, new energy, and new services. CRG is also accelerating six transformations: high-end, intelligent, green, digital, refined, and international. - Reform Measures: CRG has implemented 36 measures covering corporate governance, management improvement, production and operation, overseas development, and risk prevention. The company has also streamlined its organization and optimized its assessment system to improve efficiency. - Innovation: CRG has established a 1+9+N scientific and technological innovation system, actively promoting the transformation of scientific and technological achievements, and collaborating with universities and enterprises to develop technologies in fields such as artificial intelligence and green low-carbon energy. - Debt Resolution: CRG is actively resolving its debt issues and expects significant progress next year. Some local governments have started to repay loans, and long-term low-interest loans have been used to provide local governments with financial space. - Cash Flow: The construction industry experienced a recovery in the fourth quarter, improving CRG's cash flow. However, the company still faces pressure to achieve its annual goals. CRG is actively promoting the "100-Day Big Push" campaign to boost performance. - Cash Flow Improvement: CRG has formulated a "3,251" special action plan to collect 300 billion yuan in receivables within three years, reduce 200 billion yuan in contract assets, and improve cash flow and profitability. - Profitability Outlook: CRG expects improved profitability in the future, with the expectation of policy support for infrastructure projects. The company will continue to improve order profitability and cash flow capabilities, and deepen its presence in overseas markets. Other Important Points - Institutional Adjustment: CRG has upgraded some third-tier companies and downgraded underperforming second-tier companies based on its development strategy. - Project Implementation: There is a trend of accelerating the implementation of projects. CRG organized the "100-Day Big Push" campaign to achieve quality and quantity improvements in new orders, revenue, and profitability. - Debt Resolution Impact: Debt resolution involves one province with a total amount of 5 billion yuan, of which more than 2 billion yuan has been repaid. - Efficiency Improvement: CRG has taken measures to improve efficiency, including increasing order profitability, conversion rate, and cash flow capabilities, and actively giving up low-quality orders. - Profitability Outlook: CRG expects annual profit growth and matching cash flow, reflecting the company's shift towards high-quality development. - Local Government Debt Repayment: There is no clear priority for local government repayment of engineering fees. Local governments tend to prioritize the use of fees for民生 projects and key projects rather than specific enterprises. - Infrastructure Project Progress: Infrastructure projects in the fourth quarter have improved, but there are no significant regional differences. The progress of water conservancy and large-scale water projects has been normal under national financial support. However, PPP projects have been affected, and the construction of urban infrastructure depends on local financial support. - Order and Revenue Pressure: CRG faces certain pressure on orders and revenue for the whole year. The company expects policy measures in December to alleviate some of the pressure. - Overseas Business: The company's overseas orders decreased in the first three quarters due to its high-quality operation requirements. However, overseas revenue performance has been good, with an expected share of about 6% of total revenue. - Overseas Market Development: CRG will continue to focus on the African, Middle Eastern, and Latin American markets. - European Market: CRG has made significant progress in the European market, especially in Eastern Europe. Its tunnel boring machines have been successfully exported to Switzerland, and it has participated in the construction of a high-speed railway project in Serbia, which was completed this year. - Market Value Management: CRG is actively carrying out various work in accordance with regulatory requirements, including the formulation and implementation of market value management plans. - Dividend Distribution: CRG aims to maintain a stable dividend distribution level, even if there are fluctuations in performance, to enhance investor confidence. - State-owned Assets Supervision and Administration Commission (SASAC) Market Value Assessment: SASAC will mainly use the salary and performance assessment system for market value assessment. The specific scheme has not been released yet but is expected to include process assessment and indicators such as stock price and EPS. - Strategic Emerging Industries (SEI) Revenue and Profit Ratio: The revenue share of SEI is less than 9%, but its profit share is close to 20% due to the high overall profit margin of SEI. SASAC's requirement is around 9%, and the expected indicator will be further improved. - SEI Specific Fields: SEI mainly covers new infrastructure, construction-related fields such as ecological governance, land afforestation, advanced environmental protection, high-efficiency energy conservation, and resource recycling, underground comprehensive transportation, underground integrated facilities, and deep space exploitation and utilization. - New Equipment: CRG plans to consolidate its leading position in the field of high-end engineering equipment and expand into new energy engineering equipment, offshore engineering equipment, and modern agricultural equipment. At the same time, it will develop intelligent equipment and smart products, such as construction robots and intelligent monitoring systems. - New Materials: CRG has established a new materials research institute and has a second-tier company, Kunlun Group, focusing on bamboo winding technology. Bamboo winding uses the outer layer of bamboo with a growth period of 4-5 years, wrapped into various cylindrical shapes through an independently owned adhesive, and applied to urban pipeline construction and water supply and sewage treatment. - New Services: CRG provides inspection and testing, remote sensing surveying and mapping, geological surveying, engineering consulting, and supply chain management services. - PPP Project Receivables: There are no receivables拖欠 issues in the construction phase of PPP projects. The subsidy gap is listed in long-term receivables and is basically paid on a regular basis each year, with a scale of only tens of billions of yuan, which will not pose a major risk to the future. - M&A and Restructuring: M&A and restructuring are mainly focused on the five star赛道 of new infrastructure, new materials, new energy, and new services. The company is actively searching for and screening targets and welcomes investors to recommend suitable targets. - Real Estate Business: The real estate market experienced significant fluctuations this year, but CRG's performance was still acceptable. The company will continue to focus on risk and return, not pursuing scale growth, but adjusting strategies according to实际情况. With the introduction of national policies to reduce inventory, the company believes that there is still demand for the real estate market, and once the inventory reaches a reasonable level, the gross profit margin will recover.