Investment Rating - Buy (maintained) [2] Core Views - Revenue slightly contracted, but the amount of winning bids increased significantly [2] - The company is a leader in urban rail transit design consulting and will benefit from the development of urban rail transit [2] - The company's gross profit margin increased, and financial expenses decreased [2] - The company's winning bid amount for the first half of 2024 was RMB 5.793 billion, a year-on-year increase of 91.19% [2] - The company's design, survey, and consulting business segment achieved a gross profit margin of 30.03%, an increase of 1.33 percentage points year-on-year [2] Financial Performance - Revenue for the first half of 2024 was RMB 4.18 billion, a year-on-year decrease of 6.95% [2] - Net profit for the first half of 2024 was RMB 377 million, a year-on-year decrease of 5.75% [2] - Comprehensive gross profit margin was 19.67%, an increase of 0.84 percentage points year-on-year [2] - Operating cash flow was -RMB 721 million due to lower operating receipts than payments [2] - Financial expenses were RMB 141 million, a year-on-year decrease of 4.08% [2] Business Segments - Design, survey, and consulting business segment revenue was RMB 2.021 billion, a year-on-year decrease of 10.34% [2] - Urban rail transit engineering segment revenue was RMB 1.521 billion, a year-on-year decrease of 3.73% [2] - Industrial and civil construction and municipal engineering segment revenue was RMB 500 million, a year-on-year decrease of 25.82% [2] - Engineering contracting business segment revenue was RMB 2.159 billion, a year-on-year decrease of 3.57% [2] - Gross profit margin for this segment was 9.96%, an increase of 1.03 percentage points year-on-year [2] Winning Bids - Total winning bids for the first half of 2024 were RMB 5.793 billion, a year-on-year increase of 91.19% [2] - Design, survey, and consulting winning bids were RMB 1.784 billion [2] - Engineering contracting winning bids were RMB 4.009 billion [2] - The company won 4 design projects for urban rail transit in Beijing and Shenzhen, solidifying its leading position in the industry [2] - The company secured a single project worth over RMB 1 billion in ecological environment management [2] Financial Forecast - Expected net profit attributable to the parent company for 2024-2026 is RMB 941 million, RMB 1.072 billion, and RMB 1.118 billion, respectively [2] - Expected EPS for 2024-2026 is RMB 0.70, RMB 0.79, and RMB 0.83, respectively [2] - Current P/E ratios for 2024-2026 are 2.0x, 1.7x, and 1.6x, respectively [2] Market Data - Current stock price: HKD 1.500 [4] - Total market capitalization: HKD 2.023 billion [4] - Free float market capitalization: HKD 582 million [4] - Total shares outstanding: 1.349 billion [4] - Free float shares: 388 million [4] - 3-month turnover rate: 9.49% [4]

Financial Performance - For the six months ended June 30, 2024, the company reported revenue of RMB 4.18 billion, a decrease of RMB 312 million or 6.95% compared to RMB 4.49 billion in the same period last year[7]. - The net profit for the same period was RMB 377 million, down RMB 23 million or 5.75% from RMB 400 million in the previous year[7]. - The overall decline in revenue was attributed to a reduction in new project openings and a slowdown in the progress of ongoing projects[9]. - The group's total sales cost for the six months was RMB 3.357 billion, a reduction of RMB 289 million or 7.93% compared to RMB 3.646 billion in the previous year[13]. - The gross profit for the group was RMB 822 million, a decrease of RMB 24 million or 2.84% from RMB 846 million in the same period last year, with a gross margin of 19.67%, up from 18.83%[14]. - Other income for the group was RMB 200.90 million, a decrease of RMB 1.65 million or 0.81% from RMB 202.55 million year-on-year, primarily due to a reduction in interest income[15]. - The group reported a net loss from other gains and losses of RMB 1.47 million, a significant decrease of RMB 14.35 million or 90.71% from RMB 15.82 million in the previous year, mainly due to reduced foreign exchange gains[16]. - The income tax expense increased to RMB 603.3 million, an increase of RMB 274.3 million or 83.37% compared to RMB 329 million in the previous year[21]. - The company's profit for the period was RMB 366,030, contributing to a total comprehensive income of RMB 348,161 after accounting for other comprehensive losses[82]. - The profit attributable to ordinary shareholders for the six months ended June 30, 2024, was RMB 366,030,000, a decrease of 7.3% compared to RMB 394,678,000 for the same period in 2023[124]. Revenue Breakdown - Revenue from the design, surveying, and consulting business segment was RMB 2.02 billion, a decline of RMB 233 million or 10.35% from RMB 2.25 billion in the prior year[10]. - Revenue from the engineering contracting business segment was RMB 2.16 billion, a decrease of RMB 80 million or 3.57% compared to RMB 2.24 billion in the previous year[10]. - For the six months ended June 30, 2024, the group's design, surveying, and consulting business segment revenue was RMB 2.021 billion, a decrease of RMB 233 million or 10.34% compared to RMB 2.254 billion in the same period of 2023[11]. - The engineering contracting business segment achieved revenue of RMB 2.159 billion for the same period, down RMB 80 million or 3.57% from RMB 2.239 billion year-on-year[12]. - Revenue from design, surveying, and consulting services was RMB 2,016,551 thousand, down from RMB 2,252,405 thousand, representing a decline of 10.5%[111]. - Engineering contracting revenue was RMB 2,150,554 thousand, slightly decreased from RMB 2,236,031 thousand, a decline of 3.8%[111]. Project and Market Developments - The company secured over 300 projects in the military-civilian integration field in Xiong'an, indicating a strong growth in new areas such as ecological environment governance and urban renewal[10]. - The company won the largest design contract in the field of autonomous driving in Beijing, marking its entry into the smart transportation sector[10]. - The company ranked first in the industry for the number of design projects won in the rail transit design sector, continuing to solidify its market position[10]. - The company plans to continue expanding its market presence by undertaking preliminary project studies and network planning tasks in cities like Beijing and Hangzhou[10]. - The company aims to strengthen its position in the rail transit design industry and explore new markets such as tourism rail and emerging rail sectors[37]. - The company is focusing on expanding its market presence in the Beijing housing market and the Xiong'an area, winning bids for key projects[46]. - The company is actively developing new business areas such as vehicle-road collaboration and urban simulation, with a focus on intelligent road transformation and smart facility design[49]. Financial Position and Liquidity - As of June 30, 2024, the company's net current assets amounted to RMB 1,433 million, with cash and cash equivalents at RMB 2,235 million, indicating a strong liquidity position[27]. - The company had interest-bearing borrowings of RMB 6.722 billion as of June 30, 2024, with a debt-to-equity ratio of 86.74%[27]. - Total borrowings as of June 30, 2024, were RMB 6.722 billion, a decrease from RMB 6.914 billion as of December 31, 2023[30]. - The group's net cash outflow from operating activities was RMB 721.07 million, an improvement from RMB 1,263.04 million in the same period last year[23]. - The company's cash and cash equivalents as of June 30, 2024, were RMB 2,234,761 thousand, compared to RMB 3,309,696 thousand as of December 31, 2023, indicating a decrease of 32.5%[154]. - The total cash and cash equivalents at the end of the period was RMB 2,234,761 thousand, slightly down from RMB 2,325,039 thousand at the end of the same period in 2023[86]. Corporate Governance and Shareholder Information - The company has established a comprehensive corporate governance structure in compliance with relevant laws and regulations[66]. - Major shareholders include Chengjian Group with 571,031,118 shares, representing 59.44% of the issued domestic share capital and 42.34% of the total issued share capital[61]. - The company has not authorized any directors, supervisors, or senior management to purchase shares or debt securities during the reporting period[55]. - The board of directors has not experienced any changes in the supervisory board members during the reporting period[56]. - The company has not held any treasury shares as of June 30, 2024[65]. - The public float of the company is currently approximately 23.70%, which does not meet the minimum public float requirement of 25% as per Hong Kong Listing Rules[69]. - The company is actively taking measures to restore the public float, including potential share transfers from major shareholders within six months[69]. Strategic Focus and Future Outlook - The company plans to focus on expanding its engineering general contracting and new business development in the second half of 2024[36]. - The company is committed to accelerating the implementation of new investment models and promoting technological industrialization[39]. - The company is focusing on green low-carbon, digital services, and smart integration as part of its strategic direction[52]. - Future outlook includes ongoing investments in new technologies and potential market expansions to drive growth[100]. - The company aims to leverage global technological revolutions and industrial transformations to enhance its competitive edge in the transportation sector[52]. Industry Trends and Government Initiatives - The national engineering survey and design industry reported a revenue of RMB 941.54 billion in 2023, reflecting a year-on-year growth of 5.6%[44]. - The government is emphasizing effective investment in infrastructure and green low-carbon projects, presenting new opportunities for the surveying industry[44]. - The Ministry of Housing and Urban-Rural Development plans to accelerate the transformation of construction methods and aims to complete energy-saving renovations of existing buildings, increasing the renovation area by over 20 million square meters compared to 2023 by the end of 2025[46]. - The planning and design market is expected to gradually recover in 2024, with various projects related to urban renewal and ecological development being pushed to market[51].

Financial Performance - The company achieved a revenue of RMB 10.362 billion for the year ended December 31, 2023, a decrease of RMB 0.71 billion or 0.68% compared to the previous year[15]. - Net profit for the year was RMB 910 million, reflecting the company's commitment to social responsibility and resilient advantages in collaborative development across the entire industry chain[23]. - The company reported a gross profit of RMB 1.886 billion, with a pre-tax profit of RMB 1.018 billion for the year[18]. - The group's sales cost for the year ended December 31, 2023, was RMB 8.475 billion, a decrease of RMB 126 million compared to RMB 8.601 billion in the same period last year, representing a decline of 1.46%[49]. - The group's gross profit for the year ended December 31, 2023, was RMB 1.886 billion, an increase of RMB 53 million from RMB 1.833 billion in the previous year, with a growth rate of 2.89%[50]. - The group's other income for the year ended December 31, 2023, was RMB 417 million, a decrease of RMB 66 million from RMB 483 million in the same period last year, reflecting a decline of 13.66%[53]. - The group's annual profit for the year ended December 31, 2023, was RMB 910 million, an increase of RMB 12 million from RMB 898 million in the previous year, with a growth rate of 1.34%[63]. - The net cash inflow from operating activities for the year ended December 31, 2023, was RMB 328.601 million, significantly lower than RMB 1.149 billion in the previous year[64]. - The group's financial expenses for the year ended December 31, 2023, were RMB 291 million, a decrease of RMB 29 million from RMB 320 million in the previous year, representing a decline of 9.06%[58]. - The group's administrative expenses for the year ended December 31, 2023, were RMB 979 million, an increase of RMB 101 million from RMB 878 million in the previous year, reflecting an increase of 11.50%[56]. Business Segments - The design, surveying, and consulting business generated RMB 4.867 billion, accounting for 46.97% of total revenue, while the engineering contracting business contributed RMB 5.495 billion, representing 53.03%[17]. - Revenue from the design, surveying, and consulting segment reached RMB 4.867 billion, up RMB 406 million or 9.10% from RMB 4.461 billion in 2022[43]. - The urban rail transit engineering segment generated revenue of RMB 3.509 billion, an increase of RMB 294 million or 9.14% compared to RMB 3.215 billion in the previous year[43]. - The engineering contracting segment reported revenue of RMB 5.495 billion, a decrease of RMB 477 million or 7.99% from RMB 5.972 billion in 2022, primarily due to reduced project commencement[48]. Market Position and Strategy - The company secured six major rail transit design projects, ranking first in the industry, demonstrating its leading position in the market[22]. - The company is actively exploring new investment models to expand its business scale and areas, laying a solid foundation for future growth[22]. - The company is focusing on technological innovation and has established a technology industrial park to create a new platform for industrialized development in new energy sectors[22]. - The company aims to expand its design consulting and engineering contracting businesses, focusing on key cities such as Beijing, Fuzhou, Chengdu, and others[83][84]. - The company plans to actively develop new businesses in areas like cultural tourism, urban renewal, and new energy, targeting new investment projects[87]. - The company is focusing on the urban rail transit market, with 306 operational lines and 10,165.7 kilometers of track across 55 cities as of December 31, 2023[102]. - The company is committed to leveraging its industry advantages and technical strengths to navigate challenges posed by economic downturns and industry adjustments[88]. Innovation and Development - The company established a technology innovation park to promote cluster development and innovation in the construction design sector[28]. - The company is enhancing its technology quality system and promoting the use of intelligent design tools to reduce costs and improve quality[87]. - The company launched the "Beijing Urban Construction Design Technology Industrial Park," aimed at consolidating innovation resources and promoting technological innovation[109]. - The company is committed to promoting green and low-carbon development in the engineering surveying and design industry, aligning with national carbon neutrality goals[112]. Leadership and Management - The company has a strong management team with extensive experience in engineering and construction, enhancing its operational capabilities[146]. - The company has appointed Mr. Pei as the non-executive director and chairman since December 2019, indicating a stable leadership structure[145]. - The company emphasizes its commitment to high-level engineering qualifications, with multiple executives holding titles such as Senior Engineer and National Engineering Survey and Design Master[189][190]. - The leadership structure includes a mix of technical and managerial expertise, ensuring a balanced approach to project delivery and strategic planning[184][194]. Future Outlook - The company aims to focus on new models, new fields, and new market breakthroughs in 2024 to accelerate the construction of a new development pattern[32]. - The company provided guidance for the next fiscal year, projecting revenue growth of 10% to 12%[160]. - The company is actively pursuing market expansion, targeting a 25% increase in market share in the next two years through strategic partnerships and acquisitions[170]. - The company plans to enter new geographic markets, with an initial investment of 500 million RMB allocated for the next fiscal year[170].

Investment Rating - The report maintains a "Buy" rating for the company [3]. Core Views - The target price has been revised down to HK$2.85, corresponding to 3.8x/3.6x/3.7x P/E for 2024/2025/2026 [1][3]. - The company's net profit for 2023 decreased by 9.0% year-on-year to RMB 873 million, which was below expectations [1]. - Total revenue for 2023 was RMB 10.362 billion, a slight decline of 0.7% year-on-year, with design, surveying, and consulting revenue increasing by 9.1% to RMB 4.867 billion, while construction contracting revenue fell by 8.0% to RMB 5.495 billion [1][2]. - The company has maintained a dividend payout ratio of 27% over the past two years, resulting in a current dividend yield of 9.9% based on the current share price [2]. Financial Performance Summary - In 2023, the gross profit margin was 18.2%, an increase of 0.6 percentage points, while the expense ratio rose to 15.8%, up by 1.2 percentage points [1]. - The weighted ROE for 2023 was 12.3%, down by 2.5 percentage points, and the total debt ratio was 69.3%, a decrease of 1.4 percentage points [1]. - The net operating cash flow for 2023 decreased significantly to RMB 329 million from RMB 1.149 billion in 2022 [2]. - New contracts signed in 2023 fell by 30% year-on-year to RMB 6.168 billion, with a notable decline in EPC contracts by 52.0% [2]. Future Earnings Forecast - Earnings per share (EPS) forecasts for 2024 and 2025 have been adjusted downwards by 12.0% and 13.1% to RMB 0.683 and RMB 0.721, respectively, with a new forecast for 2026 set at RMB 0.704 [1][5]. - The projected total revenue for 2024 is RMB 10.33 billion, slightly down from 2023 [5].

建筑装饰/专业工程 公 司 研 城建设计（01599.HK） 收入微降盈利能力提升，全力推动回 A 上市 究 2024年04月01日 ——公司信息更新报告 投资评级：买入（维持） 齐东（分析师） 胡耀文（联系人） qidong@kysec.cn huyaowen@kysec.cn 日期 2024/3/28 证 书编号：S0790522010002 证书编号：S0790122080101  收入微降盈利能力提升，轨交设计行业地位领先，维持“买入”评级 当前股价(港元) 1.910 公 一年最高最低(港 元) 2.800/1.890 城建设计发布2023年全年业绩。公司作为城市轨道交通设计咨询领域的引领者， 司 坚持做大设计咨询、积极拓展新业务，将长期受益于城轨发展的红利。受工程承 信 总市值(亿港元) 25.76 包规模收缩影响，我们下调2024-2025年并新增2026年盈利预测，预计2024-2026 息 流通市值(亿港元) 7.41 更 年公司归母净利润分别为9.41、10.71、11.17亿元（2024-2025年原值13.73、16.67 总股本(亿股) 13.49 新 亿元），对应EPS为0.70 ...

Financial Performance - The company reported a total revenue of RMB 10.36 billion for the year ended December 31, 2023, a decrease of RMB 0.71 billion or 0.68% compared to RMB 10.43 billion in 2022[3]. - Net profit for the year was RMB 910 million, an increase of RMB 12 million or 1.34% from RMB 898 million in the previous year[5]. - The company's gross profit for the year was RMB 1.89 billion, compared to RMB 1.83 billion in 2022, reflecting an increase of RMB 54 million[6]. - The group achieved a gross profit of RMB 1.886 billion for the year ended December 31, 2023, an increase of RMB 53 million or 2.89% from RMB 1.833 billion in the previous year, with a gross margin of 18.21%, up from 17.56%[12]. - The design, surveying, and consulting segment's gross profit increased by RMB 131 million or 10.19% to RMB 1.416 billion, with a gross margin of 29.10%, slightly up from 28.81%[12]. - The company reported a total profit of RMB 897,676 for the year, compared to RMB 989,374 in the previous year, reflecting a decline of approximately 9.26%[73]. - The net profit attributable to equity holders of the parent company was RMB 872,852,000 in 2023, down from RMB 959,159,000 in 2022, representing a decrease of about 9.0%[90]. Revenue Breakdown - The design, surveying, and consulting business generated revenue of RMB 4.87 billion, up RMB 406 million or 9.10% from RMB 4.46 billion in 2022[9]. - The engineering contracting business reported revenue of RMB 5.50 billion, a decrease of RMB 477 million or 7.99% from RMB 5.97 billion in the previous year[10]. - Engineering contracting revenue was RMB 5,495,140 for 2023, down from RMB 5,971,865 in 2022, representing a decrease of approximately 7.93%[79]. - Revenue from external customers in China for the year was RMB 10,273,989, slightly down from RMB 10,387,381 in 2022, indicating a decrease of about 1.09%[75]. Expenses and Costs - The company's administrative expenses increased to RMB 979 million from RMB 878 million in the previous year, reflecting a rise of 11.49%[6]. - Selling and distribution expenses increased by RMB 4 million or 5.13% to RMB 82 million, driven by enhanced market expansion efforts[15]. - The sales cost for the year was RMB 84.75 billion, a decrease of RMB 1.26 billion from RMB 86.01 billion in 2022[11]. - Interest income decreased to RMB 406,049,000 in 2023 from RMB 440,847,000 in 2022, a decline of approximately 7.8%[84]. - The company's total financial expenses decreased to RMB 290,799,000 in 2023 from RMB 320,405,000 in 2022, a reduction of approximately 9.2%[84]. Assets and Liabilities - Total assets as of December 31, 2023, were RMB 24.85 billion, while total liabilities were RMB 17.22 billion[4]. - The asset-liability ratio stood at 69.30% as of December 31, 2023[23]. - The company's total liabilities were RMB 11,997,939 thousand, compared to RMB 10,896,141 thousand in the previous year, indicating an increase of 10.1%[56]. - The company's total assets as of December 31, 2023, were RMB 23,861,833, compared to RMB 21,684,811 in 2022, indicating an increase of about 10.04%[73]. - Trade payables increased to RMB 5,913,938,000 in 2023 from RMB 5,384,583,000 in 2022, an increase of approximately 9.8%[94]. Strategic Initiatives and Future Plans - The company aims to continue expanding its market presence and enhancing its service offerings in urban infrastructure projects[5]. - The company plans to focus on expanding design consulting, strengthening engineering contracting, and actively developing new businesses in 2024[27]. - The company is actively pursuing strategic partnerships and investments to enhance its business development and strengthen its technical quality system[31]. - The company plans to accelerate the development of new business areas, including digital products and industrialized interior products, while also expanding into energy storage and smart operation services[30]. - The company is focusing on expanding its presence in potential markets such as tourism rail, urban renewal, and ecological environment projects[30]. Market Environment and Industry Trends - The market environment for the surveying and mapping industry is improving, with a focus on digital transformation and smart surveying as key development directions[38]. - The planning and design market is expected to gradually recover in 2024, with various urban renewal and ecological development projects being implemented[41]. - The Ministry of Natural Resources has issued guidelines to strengthen detailed planning work, promoting urban renewal and comprehensive land development[42]. - The construction industry is expected to see a growth rate of 5.5% to 6.5% in total output for 2024[44]. Corporate Governance and Compliance - The company has complied with the corporate governance code as per the Hong Kong Stock Exchange regulations during the reporting period[49]. - The company adopted revised International Financial Reporting Standards for the first time in the current financial year, which are expected to impact annual financial statement disclosures[59]. - The audit committee has reviewed the annual performance and consolidated financial statements prepared in accordance with international financial reporting standards[52].

Financial Performance - For the six months ended June 30, 2023, the company achieved revenue of RMB 4.518 billion, a decrease of RMB 0.94 billion or 2.04% compared to RMB 4.612 billion in the same period last year[7]. - The net profit for the same period was RMB 406.66 million, down RMB 69.33 million or 14.53% from RMB 475.00 million year-on-year[8]. - The gross profit for the first half of 2023 was RMB 848.52 million, compared to RMB 705.29 million in the same period last year, indicating an increase in gross profit margin[8]. - The group's gross profit increased to RMB 848 million, up RMB 143 million or 20.28% from RMB 705 million year-on-year, with a gross margin improvement from 15.29% to 18.77%[14]. - The group's other income and gains decreased to RMB 220.12 million, down RMB 54.04 million or 19.71% from RMB 274.16 million in the previous year, mainly due to reduced interest income from PPP project financial asset models[15]. - The company's revenue for the six months ended June 30, 2023, was RMB 4,518,185 thousand, a slight decrease of 2.04% compared to RMB 4,612,123 thousand for the same period in 2022[67]. - The company reported a decrease in total comprehensive income to RMB 402,966 thousand, compared to RMB 475,606 thousand in the prior year[70]. - The profit for the period (restated) was RMB 484,099,000, contributing to a total comprehensive income of RMB 484,702,000 for the period[76]. Segment Performance - The design, surveying, and consulting business segment generated revenue of RMB 2.259 billion, an increase of RMB 244.36 million or 12.16% from RMB 2.015 billion in the previous year[11]. - The engineering contracting business segment reported revenue of RMB 2.258 billion, a decrease of RMB 338.30 million or 13.02% from RMB 2.597 billion in the same period last year[10]. - The urban rail transit engineering segment contributed RMB 1.586 billion in revenue, reflecting a growth of RMB 133 million or 9.15% compared to RMB 1.453 billion in the previous year[11]. - Revenue from the design, surveying, and consulting segment was RMB 2,258,378, an increase from RMB 2,011,022 in the previous year, reflecting a growth of about 12.3%[97]. - Revenue from the engineering contracting segment was RMB 2,255,773, down from RMB 2,592,461, indicating a decrease of approximately 12.9%[97]. Expenses and Financial Management - The financial expenses for the period were RMB 147.45 million, a decrease from RMB 164.40 million in the previous year, indicating improved financial management[8]. - Selling and distribution expenses rose to RMB 375.8 million, an increase of RMB 69.7 million or 22.77% compared to RMB 306.1 million in the previous year, driven by increased market expansion efforts[16]. - Administrative expenses increased to RMB 4.1927 billion, up RMB 727.3 million or 20.99% from RMB 3.4654 billion year-on-year, primarily due to increased R&D costs for smart design cloud platforms and other technology[17]. - The group's financial assets and contract asset impairment losses decreased to RMB 142.73 million, down RMB 32.75 million or 18.66% from RMB 175.48 million in the previous year[18]. - The company's financial expenses for the period were RMB 164,398, which included interest expenses of RMB 141,332[93]. Cash Flow and Liquidity - The group's net cash outflow from operating activities was RMB 1.263 billion, significantly higher than RMB 569.15 million in the previous year, mainly due to reduced operating receipts and increased payments[23]. - Cash flow from operating activities showed a net outflow of RMB 1,263,036,000 for the six months ended June 30, 2023, compared to an outflow of RMB 569,151,000 for the same period in 2022[78]. - The cash and cash equivalents at the end of the period decreased to RMB 2,325,039 thousand from RMB 3,178,030 thousand, a decline of approximately 26.83%[79]. - The company’s cash and bank balances decreased to RMB 2,240,045,000 as of June 30, 2023, from RMB 4,221,255,000 as of December 31, 2022[143]. Debt and Equity - As of June 30, 2023, the group had interest-bearing borrowings of RMB 6.659 billion, with a debt-to-equity ratio of 93.32%[26]. - The total borrowings of the group amounted to RMB 6,658.96 million, a decrease of 3.54% from RMB 6,903.76 million as of December 31, 2022[27]. - The group’s bank borrowings included secured loans of RMB 5,004.82 million and unsecured loans of RMB 131.98 million as of June 30, 2023[27]. - The company’s total liabilities decreased from RMB 6,903,758 to RMB 6,658,955, a reduction of approximately 3.5%[157]. - The company’s long-term bank loans amounted to RMB 4,434,760, with an interest rate range of 3.00%-5.11%[154]. Market and Strategic Initiatives - The company plans to continue expanding its market presence in the rail transit sector and enhance its engineering contracting capabilities[9]. - The company is actively participating in the PPP market, with infrastructure investment growth significantly boosted by government policies, despite challenges in project approvals and financing[43]. - The company is committed to digital transformation, integrating digital technologies into traditional industries to support smart construction initiatives[42]. - The company is focusing on technological innovation in rail transit, leveraging research platforms and patented technologies to enhance market application of innovations[50]. - The company plans to focus on expanding its design consulting services in key regions such as Beijing-Tianjin-Hebei and the Yangtze River Delta[35]. Corporate Governance - The company has established a comprehensive corporate governance framework, including various rules and regulations to ensure effective oversight and decision-making[63]. - The company has maintained compliance with applicable regulatory laws and corporate governance codes throughout the reporting period[63]. - There were no changes in the board of directors and supervisory board during the reporting period[54]. - The company did not authorize any directors, supervisors, or senior executives to purchase any shares or debt securities during the reporting period[62]. Shareholder Information - As of June 30, 2023, the major shareholder, Chengjian Group, holds 571,031,118 shares, representing 59.44% of the issued domestic shares and approximately 42.34% of the total issued share capital[58]. - The company's public float currently stands at 23.70%, which does not meet the minimum public float requirement of 25% as per Hong Kong listing rules[66]. - The company is actively taking feasible measures to restore the public float level[66]. - The company declared a dividend of RMB 255,978 thousand for the year-end 2022, impacting retained earnings[75]. Future Outlook - The company anticipates an increase in construction tasks in the second half of 2023, particularly in the Greater Bay Area, with significant projects planned for cities like Guangzhou and Shenzhen[47]. - The overall construction market is expected to see a gradual increase in project tenders, particularly in urban rail transit, which is a key focus area for future development[47]. - The company is committed to driving core technology breakthroughs and product innovation to explore new markets and expand its business scope[50].

Financial Performance - For the six months ended June 30, 2023, the company reported revenue of RMB 4.518 billion, a decrease of RMB 0.94 billion or 2.04% compared to RMB 4.612 billion in the same period last year[7]. - The net profit for the same period was RMB 406 million, down RMB 69 million or 14.53% from RMB 475 million in the previous year[7]. - The gross profit margin improved to 18.8% from 15.3% year-on-year, with gross profit increasing to RMB 849 million from RMB 705 million[8]. - Other income and gains decreased to RMB 220 million from RMB 274 million year-on-year[8]. - Administrative expenses rose to RMB 419 million from RMB 347 million, reflecting an increase of 20.8%[8]. - Financial expenses decreased to RMB 147 million from RMB 164 million, a reduction of 10.4%[8]. - The company's net profit for the first half of 2023 was RMB 406 million, a decrease of RMB 69 million or 14.53% compared to RMB 475 million in the same period last year[22]. - The profit for the six months ended June 30, 2023, was RMB 405,666,000, a decrease of 14.6% compared to RMB 475,003,000 for the same period in 2022[69]. - Total comprehensive income for the period was RMB 402,966,000, down from RMB 475,606,000 in the previous year, reflecting a decline of 15.3%[70]. Revenue Segmentation - The company's revenue for the design, surveying, and consulting business segment reached RMB 2.26 billion in the first half of 2023, an increase of RMB 245 million or 12.16% compared to RMB 2.01 billion in the same period of 2022[11]. - The urban rail transit engineering segment generated revenue of RMB 1.59 billion, up RMB 133 million or 9.15% from RMB 1.45 billion year-on-year[11]. - The engineering contracting business segment reported revenue of RMB 2.26 billion, a decrease of RMB 339 million or 13.05% from RMB 2.60 billion in the previous year, primarily due to a reduction in overall project commencement[12]. - Revenue from customer contracts was RMB 4,514,151 thousand, with design, surveying, and consulting contributing RMB 2,258,378 thousand, and engineering contracting contributing RMB 2,255,773 thousand[97]. - Total customer contract revenue for the six months ended June 30, 2023, was RMB 4,514,151 thousand, compared to RMB 4,603,483 thousand for the same period in 2022, representing a decrease of approximately 1.9%[100]. Cash Flow and Investments - For the six months ended June 30, 2023, the net cash outflow from operating activities was RMB 1.263 billion, an increase from RMB 569 million in the same period of 2022[23]. - The net cash outflow from investing activities was RMB 263 million, primarily due to expenditures on fixed assets, intangible assets, and other long-term assets amounting to RMB 141 million[23]. - The net cash outflow from financing activities was RMB 397 million, mainly due to repayment of borrowings and interest expenses of approximately RMB 407 million[23]. - The company made a significant investment of RMB 2.15 billion in Yunnan Nanjing Rail Transit Investment Construction Co., accounting for 9.30% of the total assets as of June 30, 2023[29]. Market Strategy and Development - The company plans to continue expanding its market presence in the rail transit industry and strengthen its engineering contracting capabilities[7]. - The company is focused on high-quality development and aims to achieve its operational targets for the year[7]. - In the second half of 2023, the company aims to focus on expanding design consulting and strengthening engineering contracting while promoting new business development[34]. - The company aims to strengthen its design consulting services, focusing on key regions such as Beijing-Tianjin-Hebei and the Yangtze River Delta, while expanding into emerging markets like TOD integration and urban renewal[35]. - The company is committed to national expansion in the engineering construction market, targeting multiple billion-level projects in cities like Beijing and Guangzhou, ensuring efficient project execution[36]. Operational Efficiency and Cost Management - Selling and distribution expenses increased by RMB 69.7 million or 22.77% to RMB 375.8 million, driven by enhanced market expansion efforts[16]. - Administrative expenses rose by RMB 72.73 million or 20.99% to RMB 419.27 million, mainly due to increased R&D costs for smart design cloud platforms and BIM management systems[17]. - The company achieved a reduction in impairment losses on financial and contract assets by RMB 32.75 million or 18.66% to RMB 142.73 million, due to a supplementary agreement for the Zunyi PPP project[18]. - The company is committed to improving its internal controls and management systems to enhance operational efficiency and safeguard its information assets[38]. Shareholder and Governance - The interim report will be sent to H-share shareholders in September 2023 and will be available on the Hong Kong Stock Exchange website[1]. - The company does not plan to distribute interim profits or declare interim dividends for the current period[34]. - The company’s public float currently stands at 23.70%, which does not meet the minimum public float requirement of 25% as per Hong Kong listing rules[66]. - The company has established a comprehensive corporate governance framework in compliance with relevant laws and regulations, enhancing shareholder and stakeholder interests[63]. - The company’s board of directors and supervisory board have not undergone any changes during the reporting period[54]. Financial Position and Assets - As of June 30, 2023, the total interest-bearing borrowings amounted to RMB 6.659 billion, with a debt-to-equity ratio of 93.32%[26]. - The company has pledged contract assets, trade receivables, and intangible assets as collateral for bank loans, with a net value of RMB 6.414 billion as of June 30, 2023[24]. - The company's total assets as of June 30, 2023, amounted to RMB 23,104,413 thousand, compared to RMB 22,957,754 thousand as of June 30, 2022[90][94]. - The total liabilities of the company were RMB 15,968,967 thousand as of June 30, 2023, compared to RMB 16,379,327 thousand as of June 30, 2022[90][94]. - The net asset value increased to RMB 7,135,446,000 from RMB 6,997,448,000, showing an increase of 2.0%[72]. Industry Outlook - The construction industry is expected to see improved market conditions in 2023 compared to 2022, with a focus on high-quality development opportunities[42]. - Infrastructure investment growth accelerated in the first half of 2023 due to government policies, but the supply side remains weak due to local government debt cycles and stricter bond issuance[43]. - The urban rail transit market is expected to see increased construction tasks in the second half of 2023, particularly in major cities like Guangzhou and Shenzhen[47]. - The "14th Five-Year Plan" highlights the need for urban renewal and infrastructure upgrades, creating opportunities for the company in the construction sector[44]. Research and Development - The company plans to enhance its innovation capabilities by increasing R&D efforts, focusing on key technologies, and developing new products such as smart maintenance systems and seismic isolation products to improve market share[37]. - The company is advancing the construction of a national-level R&D platform for urban rail transit, achieving significant technological milestones in prefabricated construction techniques[41]. - The company’s research and development efforts are aligned with new infrastructure demands, enhancing its market competitiveness in urban planning and rail transit technology[50]. Employee and Workforce - The employee count increased to approximately 5,074, reflecting a 4.3% rise compared to the previous year[33]. - The company recognized a total employee benefit expense of RMB 1,004,860 thousand for the first half of 2023, compared to RMB 958,980 thousand for the same period in 2022, representing an increase of approximately 4.8%[106]. - Short-term employee benefits for the six months ended June 30, 2023, amounted to RMB 3,541 thousand, up from RMB 3,105 thousand in 2022, representing an increase of approximately 14%[170]. Risk Management - The company has established a credit control department to assess credit risk, ensuring that overdue balances are regularly reviewed by senior management[15]. - The company does not hold any collateral or other credit enhancement products for its trade receivables, maintaining a diversified customer base to mitigate credit risk[15].

Financial Performance - The company achieved a revenue of RMB 10.6 billion for the year ended December 31, 2022, representing a year-on-year increase of RMB 341 million, or 3.32%[24]. - Net profit for the same period was RMB 911 million, reflecting the company's ability to maintain profitability amidst market challenges[28]. - The gross profit for 2022 was RMB 1.84 billion, with a gross margin reflecting the company's operational efficiency[26]. - The company reported a pre-tax profit of RMB 1.03 billion, showing a solid performance in its core operations[26]. - The group's sales cost for the year ended December 31, 2022, was RMB 8.759 billion, an increase of RMB 374 million or 4.46% compared to the previous year[39]. - The group's gross profit for the year ended December 31, 2022, was RMB 1.841 billion, a decrease of RMB 33 million or 1.76%, with a gross margin of 17.37%, down from 18.27% in the previous year[40]. - Other income and gains for the year ended December 31, 2022, amounted to RMB 836.06 million, an increase of RMB 336.24 million or 67.27% compared to the previous year[41]. - Selling and distribution expenses for the year ended December 31, 2022, were RMB 775.8 million, an increase of RMB 20.2 million or 2.67% from the previous year[42]. - Administrative expenses for the year ended December 31, 2022, were RMB 878.27 million, an increase of RMB 23.21 million or 2.71% compared to the previous year, primarily due to increased R&D investment[43]. - Financial expenses for the year ended December 31, 2022, were RMB 320.41 million, an increase of RMB 36.80 million or 12.98% from the previous year, mainly due to an increase in average interest-bearing borrowings[46]. Business Segments - The design, surveying, and consulting business generated RMB 4.43 billion, accounting for 41.76% of total revenue, while the engineering contracting business contributed RMB 6.17 billion, or 58.24%[25]. - The design, surveying, and consulting segment generated revenue of RMB 4.43 billion, a slight increase of RMB 0.27 billion or 0.61% from RMB 4.40 billion in 2021[38]. - The engineering contracting segment reported revenue of RMB 6.17 billion, an increase of RMB 3.14 billion or 5.36% from RMB 5.86 billion in the previous year[38]. - The company secured nine overall design projects in cities such as Beijing and Shijiazhuang, solidifying its leading position in the rail transit design industry[36]. - The company has undertaken a total of 197 subway lines for overall design by the end of 2022, contributing to urban rail transit development[31]. Strategic Focus and Development Plans - The company plans to focus on integrating development and enhancing its competitive advantages in 2023, aligning with national and capital development strategies[28]. - The company aims to achieve high-quality development while ensuring customer and shareholder satisfaction in the coming year[28]. - The company has emphasized the importance of innovation and responsibility in its operational strategy moving forward[28]. - The company aims to implement its upgrade development goals in 2023, positioning itself for significant growth opportunities[31]. - The company is focused on expanding its engineering contracting business across multiple cities, including Beijing, Guangzhou, and Chongqing[38]. - The company aims to expand its design consulting business, focusing on urban rail transit design and increasing market penetration in economically developed regions such as Beijing-Tianjin-Hebei and the Yangtze River Delta[61]. - In 2023, the company plans to enhance its engineering construction market expansion by implementing a national strategy and improving project performance and profitability[62]. Innovation and R&D - The company was awarded key national R&D projects and established a joint research center with Tsinghua University, enhancing its innovation capabilities[31]. - The company is actively promoting technological industrialization, focusing on key technology research in urban rail transit and smart construction platforms[64]. - The company is increasing R&D investment in core technologies for urban rail transit to strengthen its competitive position in a rapidly evolving market[119]. - The company focused on innovation and technology, successfully obtaining 180 patents and software copyrights, showcasing its comprehensive strength in the industry[114]. Financial Stability and Assets - Total assets as of December 31, 2022, were RMB 23.94 billion, a decrease from RMB 24.67 billion in 2021[26]. - Total liabilities decreased to RMB 16.95 billion from RMB 18.25 billion in the previous year, indicating improved financial stability[26]. - The group's asset-liability ratio as of December 31, 2022, was 70.78%[54]. - The group's net cash inflow from operating activities for the year ended December 31, 2022, was RMB 1.149 billion, attributed to improved cash flow management[50]. Market and Economic Environment - The company has identified significant opportunities in urban infrastructure development, as emphasized by national policies aimed at enhancing urban public transport and rail transit systems[69]. - The focus on infrastructure investment remains a key strategy for stabilizing the macro economy in 2023[78]. - In 2022, the national residential property sales area reached 1.11 billion square meters, a year-on-year decrease of 22.3%[80]. - The company is positioned to benefit from the loosening of real estate policies, which may positively impact the market in the coming years[80]. Corporate Governance and Management - The company has a strong team of supervisors with backgrounds in finance, engineering, and management, enhancing its governance structure[101]. - The management team is well-equipped to navigate the complexities of the market, leveraging their extensive experience and qualifications[102][103]. - The company is committed to maintaining high standards of corporate governance through the appointment of qualified supervisors[97][101]. - The Supervisory Board held three meetings in 2022, focusing on compliance and internal control supervision to enhance corporate governance[194]. Related Party Transactions - The company is committed to monitoring and managing related party transactions in compliance with Hong Kong listing rules[166]. - The company generated revenue of RMB 310 million from services provided to the Construction Group and its affiliates in 2022, against an annual cap of RMB 527 million[176]. - The actual expenditure incurred by the Construction Group and its affiliates for services provided by the company in 2022 was RMB 88 million, compared to an annual cap of RMB 2,142 million[176]. - Independent non-executive directors confirmed that the related party transactions were conducted in the ordinary course of business and on normal commercial terms[187]. Shareholder Information - The board proposed a final dividend of RMB 0.1898 per share, subject to shareholder approval on May 25, 2023[126]. - The company maintains a profit distribution policy prioritizing cash dividends, ensuring continuity and stability[129]. - Major shareholders included Chengjian Group with 571,031,118 shares, representing 59.44% of the domestic share capital and 42.34% of the total issued share capital[149]. - The company’s public float is currently approximately 23.70%, which does not meet the minimum public float requirement of 25% as per Hong Kong Listing Rules[189].

Financial Performance - The company achieved a revenue of RMB 10.6 billion for the year ended December 31, 2022, an increase of RMB 341 million or 3.32% compared to RMB 10.26 billion in 2021[2]. - Net profit for the year was RMB 911 million, up RMB 8 million or 0.89% from RMB 903 million in the previous year[5]. - The company's gross profit for 2022 was RMB 1.84 billion, compared to RMB 1.87 billion in 2021, reflecting a decrease of RMB 133 million[6]. - The gross profit for the group was RMB 1.841 billion, a decrease of RMB 33 million or 1.76% from RMB 1.874 billion in the previous year, resulting in a gross margin of 17.37%, down from 18.27% year-on-year[12]. - The company reported a net profit of RMB 911 million for the year ended December 31, 2022, an increase of RMB 8 million or 0.89% from RMB 903 million in the previous year[19]. - The net profit attributable to the parent company was RMB 972,251 thousand, up from RMB 920,641 thousand in 2021, representing a growth of 5.6%[51]. - The basic and diluted earnings per share for the year were RMB 0.72, compared to RMB 0.68 in the previous year, reflecting an increase of 5.9%[51]. - The company reported a profit for the year of RMB 972,251,000, contributing to a total comprehensive income of RMB 907,739,000 for the year ended December 31, 2022[57]. Revenue Segmentation - The design, surveying, and consulting business generated revenue of RMB 4.43 billion, a slight increase of RMB 27 million or 0.61% from RMB 4.40 billion in 2021[9]. - The engineering contracting business contributed RMB 6.17 billion, an increase from RMB 5.86 billion in the previous year[3]. - Total revenue for the year ended December 31, 2022, was RMB 10,599,845 thousand, with contributions from the Design, Surveying, and Consulting segment at RMB 4,444,876 thousand and the Engineering Contracting segment at RMB 6,173,454 thousand[73]. - Revenue from external customers in the engineering contracting segment reached RMB 6,156,171 for the year ended December 31, 2022, compared to RMB 5,792,279 in 2021, reflecting an increase of about 6.30%[80]. - Customer contract revenue from external customers in the consulting segment was RMB 4,421,960 for the year ended December 31, 2022, compared to RMB 4,396,215 in 2021, showing a slight increase of approximately 0.59%[81]. Cost and Expenses - The group incurred a cost of sales of RMB 8.759 billion for the year ended December 31, 2022, up RMB 374 million or 4.46% from RMB 8.385 billion in the previous year, with the cost increase in line with revenue growth[11]. - Selling and distribution expenses rose to RMB 775.8 million, an increase of RMB 20.2 million or 2.67% from RMB 755.6 million in the previous year, driven by increased market expansion efforts[14]. - Administrative expenses increased to RMB 878.27 million, up RMB 23.21 million or 2.71% from RMB 855.06 million in the previous year, primarily due to increased R&D investments[15]. - Financial expenses were RMB 320.41 million, an increase of RMB 36.80 million or 12.98% from RMB 283.61 million in the previous year, mainly due to an increase in average interest-bearing borrowings[17]. - Research and development costs for the year ended December 31, 2022, were RMB 385,984,000, compared to RMB 355,681,000 in 2021, representing an increase of approximately 8.5%[87]. Assets and Liabilities - Total assets as of December 31, 2022, were RMB 23.94 billion, down from RMB 24.67 billion in 2021[4]. - Total liabilities decreased to RMB 16.95 billion from RMB 18.25 billion in the previous year[4]. - As of December 31, 2022, the total borrowings of the group amounted to RMB 6,903.76 million, a decrease from RMB 7,197.00 million in 2021, reflecting a reduction of approximately 4.07%[24]. - The company’s total liabilities decreased to RMB 10,968,014 thousand from RMB 12,920,290 thousand in the previous year[54]. - The company’s total assets as of December 31, 2022, were RMB 24,665,602, compared to RMB 21,361,732 in 2021, representing a growth of approximately 15.00%[1]. Cash Flow and Investments - The net cash inflow from operating activities was RMB 1.149 billion, significantly up from RMB 383.74 million in the previous year, attributed to improved cash flow management[20]. - The net cash flow from operating activities for the year ended December 31, 2022, was RMB 1,149,443 thousand, significantly higher than RMB 383,738 thousand in 2021, indicating a substantial increase of about 199%[60]. - The net cash flow used in investing activities for the year ended December 31, 2022, was RMB (323,426) thousand, an improvement compared to RMB (703,872) thousand in 2021, showing a reduction in cash outflow by approximately 54%[62]. - The net cash flow used in financing activities for the year ended December 31, 2022, was RMB (853,369) thousand, a decrease from RMB 1,017,715 thousand in 2021, indicating a change of about 184%[62]. - Capital expenditures for the year totaled RMB 264,345 thousand, including new property, plant, and equipment, intangible assets, and right-of-use assets[73]. Strategic Initiatives and Market Position - The company plans to continue expanding its design and consulting services, particularly in urban rail transit and municipal engineering[5]. - The company is focused on integrating industry resources and enhancing service capabilities to drive future growth[5]. - The company is actively fostering technological industrialization, with initiatives in smart design platforms and urban disaster prevention technologies[30]. - The company is focusing on urban renewal and TOD (Transit-Oriented Development) projects to enhance competitiveness in the traditional construction market[43]. - The company has established a strong competitive position in the water environment sector, leveraging big data and AI technologies to meet user needs[46]. Workforce and Corporate Governance - The workforce as of December 31, 2022, comprised approximately 4,946 employees, with 92% holding a bachelor's degree or higher, reflecting a highly educated workforce[33]. - The company has complied with the corporate governance code as per the Hong Kong Stock Exchange regulations during the reporting period[48]. - Management measures for 2023 include enhancing corporate governance and optimizing the ERP system to support sustainable growth[31]. Acquisitions and Subsidiaries - The company completed the acquisition of a subsidiary, Residential Institute, for a cash consideration of RMB 69,770 thousand, enhancing its market share in architectural design services[106]. - The company has a total of 14 subsidiaries, with significant equity stakes in each, including 100% ownership in several key entities such as Beijing Urban Construction Design Institute and Beijing Urban Construction Rail Transit Engineering Consulting Co., Ltd.[64]. - The company sold its stake in Beijing Urban Construction Intelligent Control Technology Co., Ltd., reducing its ownership from 60% to approximately 30.83%, resulting in a loss of control over the subsidiary[110]. Market Trends and Government Policies - The government has emphasized the importance of infrastructure development, aiming to stabilize economic growth and enhance urban transportation systems[34]. - The PPP model will continue to play a significant role in infrastructure construction, with an increasing integration of innovative financing models[40]. - The construction industry faced challenges in 2022, with a 22.3% year-on-year decline in national commercial housing sales area, totaling 1.11 billion square meters from January to October[43].