China Construction Group (603018): Profitability continued to improve Q3 performance basically in line with expectations

The company achieved operating income of 27 in the first three quarters of 2019.

45 ppm, an increase of 4 per year.

07%.

The growth rate of revenue growth is mainly due to the decline in Q3 single quarter revenue.

Q1, Q2, and Q3 revenues increased by 34 respectively.

88%, 0.

89%, -11.

12%, we think it is mainly due to the rapid growth of the company’s revenue in the third quarter of 2018, resulting in a high base.

In the third quarter of 2018, due to the rapid growth of the company’s EPC business revenue, revenue increased by 63 per year.

4%, the highest growth rate in the third quarter since listing.

The company achieved a consolidated gross profit margin of 31 in the first three quarters of 2019.

92%, an increase of 1 over the same period last year.

77%.

The gross profit margins of Q1, Q2, and Q3 exceeded 0, respectively.

88%, 3.

63%, 6.

50%.

The company spent 15 during the first three quarters of 2019.

70%, an increase of 0 compared with the same period last year.

29%, mainly due to the increase in management expense ratio.

The changes in sales expenses, management expenses and financial expenses accounted for -0.

16%, +0.

64%, -0.

19%.

R & D costs increase by 0 every year.

86%, mainly due to the company’s increased R & D and promotion of BIM technology applications, trunk roads, key railway technologies and comprehensive transportation.

The company’s assets + credit impairment losses accounted for 4 in the first three quarters of 2019.

35%, rising by 0 every year.

12%; net operating cash flow for the first three 都市夜网 quarters is -0.

76 yuan, which has deteriorated in previous years.

Earnings forecast and rating: We maintain our earnings forecast for the company. It is expected that the company’s EPS for 2019-2021 will be 1.

11 yuan, 1.

34 yuan, 1.

56 yuan, the closing price on October 25 for PE were 10.

2 times, 8.

4 times, 7.

2 times, maintaining the level of “prudent overweight”.

Risk reminder: macroeconomic downside risks, orders in hand fall below expectations, business development outside the province is less than expected, mergers and acquisitions integration is less than expected, construction project progress is slow.