China Communications Construction (601800): Overseas business dragged down revenue reduction and increase thickening performance

Investment Highlights In 2018, the company’s newly signed contract value was 8908.

7.3 billion, an annual increase of 1.

12%, the rapid growth of orders broke through the substitution of major overseas orders.

New construction contracts for infrastructure construction, infrastructure design, dredging, and other businesses were changed to Mobile-1.

54%, 30.

80%, 17.

50%, 15.

66%; overseas and domestic newly signed contracts changed -29 respectively.

51%, 8.

51%, overseas orders are mainly due to the high base last year.

The company achieved operating income of 4,908 in 2018.

72 ppm, an increase of 1 per year.

67%, the short-term growth rate of income is mainly dragged down by the increase in overseas income.

Infrastructure construction, infrastructure design, dredging business, and other businesses achieved operating income of 4,304, respectively.

88 ppm, 315.

5.7 billion yuan, 327.

7.4 billion, 124.

2.6 billion, an increase of 5 each year.

34%, 17.

03%, -3.

85%, 66.

14%, dredging business has improved; by region, the mainland and overseas revenues of 3954.

97 ppm, 953.

750,000 yuan, a short-term change of 8.

48%, -19.

33%, domestic income grew steadily, and overseas income declined.

The company achieved a comprehensive gross profit margin of 13 in 2018.

49%, a decrease of 0 every year.

48%, mainly due to the increase in material costs.

The gross profit margins of infrastructure 天津夜网 construction, infrastructure design, dredging business, and other businesses respectively changed Mobile-0.

12%, -2.

74%, 1.

02%, 2.

09%, the gross profit margins of all businesses except bulk dredging have fallen; from the perspective of cost composition, it is mainly due to the increase in material costs by 4%; the gross profit margins of China (excluding Hong Kong, Macao and Taiwan) and other countriesChange by -1.

40%, 2.

50%.

The company’s cost share during 2018 decreased by 0 compared to last year.

54%, the proportion of sales expenses increased by 0 every year.03%, the proportion of management expenses decreased by 0.

18%, accounting for 0% reduction in financial expenses.

66%, mainly due to exchange rate changes to achieve exchange gains and adjustments to the discounted interest rates on project expenditures in accordance with the requirements of the new income regulations; R & D expenses accounted for 2%.

04%, a year increase of 0.

26%.

The company’s assets impairment losses in 2018 decreased by 1 compared with the previous year.

17%, credit impairment + asset impairment totaled 27.

9.2 billion, a decrease of 50 previously.

96%; net operating cash flow is zero.

56 yuan, a decrease of 2 each year.

06 yuan / share, cash flow has deteriorated.

Earnings forecast and rating: We have lowered the company’s earnings forecast and expect the company’s EPS for 2019-2021 to be 1.

34 yuan, 1.

47 yuan, 1.

63 yuan, the PE corresponding to the closing price on March 29 is 9.

3 times, 8.

5 times, 7.

7x, maintaining the rating of “prudent increase”.

Risk reminder: Macroeconomic downside risks, less-than-expected overseas business expansion, changes in overseas policies, less-than-expected construction progress, less-than-expected new growth orders, and risk of exchange losses due to exchange rate changes