国投证券:央企市值考核有望落地 看好优质建筑央企表现

SDIC Securities: The market value assessment of central enterprises is expected to be implemented, and the performance of high-quality construction central enterprises is optimistic

Zhitong Finance ·  Jan 25 00:38

The Zhitong Finance App learned that SDIC Securities released a research report saying that the market capitalization assessment requirements for central enterprises have been heavily released, that market returns for construction central enterprises are worth looking forward to. Combined downgrades will release liquidity, and they are optimistic about the current round of construction central enterprise market performance. In 2023, the fundamentals of construction central state-owned enterprises will be steady, and the leading market share of construction central enterprises will continue to rise. Improved operating indicators are expected to bring about an increase in valuation and recommend undervalued high-quality infrastructure state-owned enterprises; in addition, Sinoma International's overseas business, which targets high-quality international engineering central enterprises, is growing rapidly, and plans to increase dividend rates increase the company's returns, and are optimistic about their growth and the valuation increase brought about by business model optimization in the long term.

Recommended attention: China Railway (601390.SH), China Communications Construction (601800.SH), China Railway Construction (601186.SH), China Construction (), China Metallurgical (US), Sinoma International (Sichuan). 601668.SH 601618.SH 600970.SH

Incident: On January 24, the State Assets Administration Commission stated that it would further include market value management results in the assessment of central enterprise leaders, and stated that efforts will be made to improve the quality of listed companies controlled by central enterprises and strengthen investor returns. The central bank decided to lower the deposit reserve ratio of financial institutions by 0.5 pct starting February 5 to provide the market with long-term liquidity of 1 trillion yuan.

SDIC Securities views are as follows:

Market value management will be included in central enterprise assessment indicators, and high-quality construction central enterprises can expect market returns.

On January 24, the State Assets Administration Commission proposed to further include market value management results in the assessment of central enterprise leaders, guide central enterprise leaders to pay attention to the market performance of listed companies they control, promptly convey confidence, stabilize expectations, increase cash dividends, and better return investors through market-based shareholding and repurchases. Recently, the State Council issued “Opinions on Further Improving the State-owned Capital Operating Budget System”. Previously, the State Council issued “Opinions on Further Improving the State-owned Capital Operating Budget System”, which proposed that state-owned holding and participating enterprises establish and improve dividend mechanisms in accordance with the principles of marketization and legalization. It is expected that the dividends of state-owned enterprises will improve in the future.

State-owned enterprise reform is a long-term main line, and the combination of quantity and quality helps central enterprises repair their valuations.

The new round of state-owned enterprise reform has continued to advance since 2023. The SASAC introduced a “one profit, five rate” assessment system. In addition to incremental revenue and profit indicators, it is also increasing the assessment of central enterprises' cash flow, turnover ratio, and profitability. After the SASAC optimizes the assessment indicators for state-owned enterprises, key business indicators such as ROE, cash flow, turnover ratio, and profitability of construction central enterprises are expected to be further improved. At the same time, the SASAC encourages listed companies to implement mergers, acquisitions and restructuring as a platform, which is expected to give central enterprises new growth impetus. The current round of state-owned enterprise reforms combines quantity and quality, and the undervaluation levels of construction central enterprises due to the impact of advanced capital business models and the slowdown in growth in the past are expected to be repaired.

The fundamentals of construction central enterprises are steady, and the market share of leading companies continues to rise.

Recently, 7 central construction and infrastructure companies have announced new order data for 2023. Looking at the full year, the total amount of new contracts signed by the 7 central construction enterprises achieved a year-on-year positive increase, totaling 14.90 trillion yuan, an increase of 7.32% over the previous year. Among them, China Energy Construction, China Power Construction, China Construction, and China Chemical all achieved double-digit growth. The overall number of new orders in the 2023Q4 sector accelerated markedly. The total amount of new contracts signed by the seven central construction companies was 6.21 trillion yuan, an increase of 14.01% year on year (up 0.5% year on year in Q3). Among them, China Power Construction, China Railway, and China Railway Construction Q4 new contract amounts were significantly higher than the Q3 growth rate, with YOY +38.05% (Q3yoY +8.84%), 23.72% (Q3yoY -31.47%), and 7.59% (Q3yoY -16.65%). An international engineering state-owned enterprise, Sinoma International increased 18% of new contracts over the year, of which new contracts signed overseas increased 55% year over year. At present, the fundamentals of the construction industry are improving as a whole. New orders signed by central construction enterprises have maintained steady growth, and the market share of the eight major central enterprises has continued to increase. The market share of new contracts signed in 2017-2023.3Q has increased from 28.64% to 46.11%.

Risk warning: The implementation of policies fell short of expectations, the reform of state-owned enterprises fell short of expectations, and the construction of a valuation system with Chinese characteristics fell short of expectations.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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