China Communications Construction (601800): 1Q19 orders, profit slightly exceeded expectations, usher in significant improvement overseas

China Communications Construction (601800): 1Q19 orders, profit slightly exceeded expectations, usher in significant improvement overseas

The performance of the first quarter of 2019 slightly exceeded expectations. China Communications Construction announced its first quarter of 2019 results: 成都桑拿网 operating income of 1,022.

5 ‰, an increase of 9 in ten years.

6%; net profit attributable to mother 39.

3 ppm, an increase of 14 in ten years.

4%, slightly more than our expectations, mainly due to rapid revenue growth and reduction in financial expenses, expenses and so on.

The company’s 1Q19 gross profit margin decreased by 0.

1ppt to 12.

5%; the total period rate will increase by 0 every year.

1ppt, management and financial expenses decreased but R & D expenses increased; net income from changes in fair value changed from -0 in 1Q18.

300 million to 1.

3 ppm, mainly due to changes in the fair value of derivative financial instruments; asset disposal gains were from 614 in 1Q18.

0 million yuan to 1.

6 ppm, mainly due to the increase in land acquisition and disposal gains; the company’s net interest rate decreased by 0 in the first quarter of 19.

2ppt to 3.

8%; net operating cash margin is expanding by 224 per year.

0 billion to 382.

800 million US dollars, mainly due to receivable turnover rate.

Development Trends 1Q19 revenue accelerated, and is expected to accelerate further.

The company’s revenue growth in the first quarter of 19 reached 9.

6%, -7 in the fourth quarter of 2018.

Significant improvement of 5%, reflecting the company’s smooth start to resume work.

We expect domestic infrastructure construction to accelerate further in 2Q19, and a significant recovery overseas. The company’s overall revenue growth in 2Q19 is expected to exceed 10%, driving steady growth in performance.

Municipal environmental protection driven 1Q19 orders accelerated growth.

The company’s new long-term single-year growth of 13 in the first quarter of 19.

4%, the growth rate continued to increase from 4Q18; of which, the road axial extension decreased by 31.

7%, a decrease from the previous month; municipal and environmental protection increased by 113 each year.

0%, continued strong.

Looking ahead, the company is expected to exceed the new single target for the full year (target growth of 8%).

Major overseas projects resumed work, and orders improved significantly.

The company announced that the Malaysia East Coast Railway project was renegotiated by the Chinese and Malaysian governments. The total contract value was adjusted from Malaysian rupiah 46 billion US dollars to 44 billion U.S. dollars (about 72 billion U.S. dollars).

In the first quarter of 19th, the company’s new overseas single-tier growth rate also returned to 8%, a significant improvement from the previous quarter.

Earnings forecast We maintain the company’s profit forecast for 2019/20 unchanged.

It is estimated and suggested that the current company A / H share merger corresponds to 9 respectively.

2x / 5.

0x 2019e P / E (based on EPS after replacing Perpetual China Voting Index and Preferred Stock Conversion).

We maintain a “Recommended” rating of 16 for A / H shares.

1 yuan / 12.

The target price of 0 is unchanged (corresponding to 12x / 8x 2019eP / E, respectively), implying 31% / 57% upside. Risks Local government financing has tightened faster than expected, and overseas projects have progressed less than expected.