China Engineering International (002051): Focus on the progress of overseas project performance

China Engineering International (002051): Focus on the progress of overseas project performance

The 3Q 2019 results were lower than expected. China Industrial International announced the 3Q 2019 results: the first 3 quarters achieved operating income of 76.

900 million, a decrease of 24 every year.

4%; net profit attributable to mother 7.

600 million, a decrease of 26 every year.

0%; of which revenue was 21 in the third quarter.

9 trillion, a reduction of 47 a year.

9%; realized net profit attributable to mother 2.

600 million, a decrease of 33 a year.

6%; due to the compulsory lag of some projects in the past, the project recognition revenue decreased, the company’s 3Q performance was lower than our expectations.

  In the third quarter of 19, the company’s gross profit margin increased by an average of 5.

2ppt to 18.

7%; the total cost rate for the four periods will increase by 4.

1ppt, in which the sales / management / R & D expense ratio is increased by 2.



1ppt, financial cost rate is reduced by 2 every year.

9ppt; asset / credit impairment losses are reduced by 52 per year.

1%; 3Q19 company effective tax rate reduced by 3.

5ppt to 3.

8%, driving the company’s 3Q19 net profit margin to increase by 2.

5ppt to 11.


  1-3Q company’s operating cash flow is still in a net alternating state (net alternating).

0 ppm, a net inflow of 10 for the same period last year.

US $ 100 million, we believe that it is mainly due to the initial stage of inventory turnover due to multiple projects being in the implementation stage (project cash expenditures and settlement payments are slower to recover).

  Development trends focus on overseas orders and performance.

The first three 杭州夜网论坛 quarters of the company’s overseas new ten-year order.

USD 300 million, a 142% increase over the past ten years, achieving strong growth at a low base.

However, in terms of project performance, the company’s overseas new performance projects amounted to 6 in the first half of the year.

200 million US dollars, the effective amount is at a historical low.

We believe that the new economic performance of the company’s overseas projects in the third quarter may still be slow in the context of uncertain international economic prospects.

  China’s yuan business is progressing smoothly.

The first three quarters of the company’s domestic new ten-year order.

800 million US dollars, a previous substantial increase of 682%, mainly due to China’s contribution after the consolidation of orders increased.

In the first three 杭州夜网论坛 quarters, the company’s domestic new high-frequency orders in each quarter were 7 respectively.


4 trillion, rising quarter by quarter, to some extent reflects the smooth progress of China’s yuan business.
We believe that in the future, the synergy of China Yuan’s qualifications, technological advantages, corporate financing, and business advantages will gradually play out.

  Earnings forecasts and estimates We maintain our 2019/2020 net profit forecasts unchanged.

Currently corresponds to 2019-12.

7 times price-earnings ratio.

We maintain our Outperform rating and lower our target price by 9% to 11 as the performance of overseas projects exceeds expectations.

8 yuan, corresponding to 15 times the 2019 price-earnings ratio, which is 18 more than the current one.

5% upside.

  Risky overseas projects are forced to continue.

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