China Construction (601668): Q3 performance growth rate increased by 19%, low valuation and low gain

China Construction (601668): Q3 performance growth rate increased by 19%, low valuation and low gain

Investment Highlights: Maintain overweight.

The company’s revenue from January to September was about 9736 trillion // 15.

8%, net profit is about 30 billion yuan / + 9.

8% is in line with expectations; maintain forecast EPS for 2019-21 is 1.

02/1.

12/1.

22 yuan growth rate of 12% / 10% / 9%, maintaining a target price of 7.

95 yuan, corresponding to July 2019-21.

7/7.

1/6.

5 times PE, increasing 南宁桑拿 holdings.

  The growth rate of Q3 net profit accelerated, and the asset-liability ratio decreased significantly.

1) Q1-Q3 revenue / net profit growth rates were 10 respectively.

2/21.

7/14.

6%, 8.

8/4.

2/18.

5%, Q3 speed-up due to the high growth of housing construction infrastructure construction / real estate sales increase / assets and credit impairment reduction ratio; 2) housing construction / infrastructure / real estate income ratios were 61.

8/22.

7/14.

9%, gross profit accounted for 32.

6/17.

2/45.

7%; 3) Gross profit margin 10.

43% (-0.

06pct), net interest rate 4.

52% (+0.

02pct); 4) Net cash flow from operations was US $ 106.7 billion (-65 billion yuan in the same period last year) due to net flow or net increase in the main construction business; 5) Asset-liability ratio was 76% (-2.

6 points).

  Q3 single-speed increase in the new millennium, real estate sales performance.

1) New chronic single 2 from January to September.

04 trillion (+ 9%), of which construction business1.

77 trillion (+6.

3%), a single quarter growth rate of 15% significantly increased (Q1 / Q2 is 9 / -2%); 2) Housing construction / infrastructure orders accounted for 70 of the total orders.

5/15.

8% growth rate +17.

2 / -24.8%, infrastructure improved compared to the previous month (both H1 is +18.

9 / -37.

4%); 3) overseas orders 108.9 billion (-6.

8%) accounted for 5.

3%; 4) Real estate carbon dioxide increased by 30%.

4% / sale area increased by 16.

At the end of the third quarter, the land reserve was 96.95 million square meters (-1.

2%).

  The four-in-one is improved and promoted, and the transition and upgrade continue to advance.

1) Continue to build a four-in-one business model of planning and design / investment development / infrastructure construction / house construction engineering; 2) Deeply cultivate key areas to supplement shortcomings in infrastructure, deepen the layout of large-scale transportation infrastructure, and accelerate transformation investment / construction 杭州桑拿 / operation integration3) The overseas layout continued to improve, winning the bid for the Israeli subway project, etc. 4) The increase has been -5 since the beginning.

2% far lower CSI 300 (28.

4%); PE is predicted to be only 5 in 2019.

1x / PB (MRQ) is only 0.

9 times the lowest in the past 5 years.

  Risk warning: rapid growth in infrastructure investment, tighter real estate policies, etc.