河北建设(01727) - 2025 - 中期业绩

Announcement Information This section provides fundamental information about Hebei Construction Group Corporation Limited, including its registration, listing details, and the composition of its Board of Directors Company Basic Information Hebei Construction Group Corporation Limited (Stock Code: 1727), registered in the PRC with H shares listed on HKEX, announces its unaudited consolidated interim results for the six months ended June 30, 2025 - Company name: Hebei Construction Group Corporation Limited, stock code: 1727[2] - The company was incorporated in the People's Republic of China, and its H shares were listed on the Main Board of the Hong Kong Stock Exchange on December 15, 2017[2][97] - This announcement presents the unaudited consolidated interim results for the six months ended June 30, 2025[2] Board of Directors As of the announcement date, the Board comprises 5 executive directors, 1 non-executive director, and 3 independent non-executive directors - Executive Directors include Mr. Li Baozhong, Mr. Shang Jinfeng, Mr. Zhao Wensheng, Mr. Tian Wei, and Mr. Zhang Wenzhong[4] - Non-executive Director is Mr. Li Baoyuan[4] - Independent Non-executive Directors include Ms. Shen Lifeng, Ms. Chen Xin, and Mr. Chen Yisheng[4] Financial Highlights This section summarizes the company's key financial performance for the first half of 2025, highlighting significant year-on-year changes in revenue, net profit, and earnings per share Key Financial Data for H1 2025 For the six months ended June 30, 2025, the company's revenue, net profit, and EPS significantly decreased year-on-year by 28%, 21%, and 14% respectively 2025 H1 Financial Highlights (Year-on-Year) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 7,908,202 | 11,015,171 | Down 28.21% | | Net Profit | 95,244 | 120,879 | Down 21.20% | | Earnings Per Share (RMB/share) | 0.06 | 0.07 | Down 14.29% | Business Review This section provides an overview of the company's core construction businesses, including new contract performance, segment distribution, and representative projects across various categories Company Business Overview The company is a leading non-state-owned construction group in China, with main revenue from building construction, infrastructure construction, and specialized and other construction engineering; new contracts in H1 2025 decreased by 42.41% to RMB 8.039 billion - The company is a leading non-state-owned construction group in China, primarily engaged in construction engineering contracting, including building construction, infrastructure construction, and specialized and other construction engineering contracting businesses[6][8] 2025 H1 New Contract Value Overview | Indicator | 2025 H1 (RMB billion) | 2024 H1 (RMB billion) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | New Contract Value | 8.039 | 13.960 | Down 42.41% | New Contract Value Distribution by Region and Segment | Category | 2025 H1 Share | 2024 H1 Share | | :--- | :--- | :--- | | By Region | | | | Beijing-Tianjin-Hebei | 79.71% | 88.91% | | Others | 20.29% | 11.09% | | By Segment | | | | Building Construction Engineering | 40.38% | 55.98% | | Infrastructure Construction Engineering | 39.05% | 18.77% | | Specialized and Other Construction Engineering | 20.57% | 25.25% | Building Construction Business This business primarily provides general contracting services for residential, public, industrial, and commercial building projects, with new contracts in H1 2025 significantly down by 58.46% to RMB 3.246 billion - The company undertakes most building construction projects as a general contractor, responsible for all major aspects including construction, foundation engineering, curtain walls, decoration, and fire protection engineering[9] Building Construction Business New Contract Value | Indicator | 2025 H1 (RMB billion) | 2024 H1 (RMB billion) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | New Contract Value | 3.246 | 7.815 | Down 58.46% | Building Construction Business New Contract Value Distribution by Segment | Segment | 2025 H1 Share | 2024 H1 Share | | :--- | :--- | :--- | | Residential Building Engineering | 35.85% | 34.54% | | Public Building Engineering | 51.27% | 46.87% | | Industrial Building Engineering | 12.88% | 18.59% | | Commercial Building Engineering | 0.00% | 0.00% | Infrastructure Construction Business This business primarily offers general contracting services for municipal and transportation infrastructure projects, with new contracts in H1 2025 increasing by 19.81% to RMB 3.139 billion - Business scope includes water supply and treatment, gas and heating, urban pipelines, landscaping, roads, bridges, and airport runway facilities[11] - Major clients are local governments, and the company undertakes most of these construction projects as a general contractor[11] Infrastructure Construction Business New Contract Value | Indicator | 2025 H1 (RMB billion) | 2024 H1 (RMB billion) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | New Contract Value | 3.139 | 2.620 | Up 19.81% | Infrastructure Construction Business New Contract Value Distribution by Segment | Segment | 2025 H1 Share | 2024 H1 Share | | :--- | :--- | :--- | | Municipal Infrastructure Construction Engineering | 77.22% | 62.43% | | Transportation Infrastructure Construction Engineering | 22.78% | 37.57% | Specialized and Other Construction Engineering Contracting Business This business leverages professional qualifications in M&E installation, steel structures, and decoration, with new contracts in H1 2025 decreasing by 53.09% to RMB 1.654 billion, but with significant growth in new energy and water conservancy - Business scope includes construction engineering contracting projects in specialized fields such as M&E installation, steel structure construction, and decoration and renovation[13] Specialized and Other Construction Engineering Contracting Business New Contract Value | Indicator | 2025 H1 (RMB billion) | 2024 H1 (RMB billion) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | New Contract Value | 1.654 | 3.525 | Down 53.09% | Specialized and Other Construction Engineering Contracting Business New Contract Value Distribution by Segment | Segment | 2025 H1 Share | 2024 H1 Share | | :--- | :--- | :--- | | M&E Installation | 6.17% | 25.20% | | Steel Structure | 0.66% | 0.17% | | Decoration and Renovation | 12.52% | 5.25% | | New Energy | 55.99% | – | | Water Conservancy and Hydropower | 12.33% | – | | Other Construction Businesses | 12.33% | 69.38% | Representative Engineering Projects The report lists representative new, ongoing, and completed projects in H1 2025 across various categories, showcasing the company's project execution capabilities in different regions and sectors - Representative new contracts include transportation infrastructure projects (e.g., S333 Haixing to Shunping Highway Anping Section Reconstruction Project), municipal infrastructure projects (e.g., Flood Control and Drainage Project – Baoding City Pipeline Network and Supporting Municipal Infrastructure Project), residential building projects, and new energy projects (e.g., Antai (Baoding) New Energy Technology Co., Ltd. New 100MW/200MWh Independent Energy Storage Power Station Project)[15][17] - Representative ongoing projects cover public buildings (e.g., China Academy of Chinese Medical Sciences Guang'anmen Hospital Baoding Hospital EPC Project), residential buildings (e.g., Huangshanmudian Liangmachang Resettlement Housing Project in Pingfang Township, Chaoyang District), commercial buildings, industrial buildings, transportation infrastructure construction, municipal infrastructure, and specialized construction businesses like M&E installation and decoration[18][20][23][24][26][27] - Representative completed projects include public buildings (e.g., Knowledge City ZSCXN-B3–2 (Medical City) Project), residential buildings (e.g., Botou City Longtun New City Urban Village Renovation Phase II Project), commercial buildings, industrial buildings, and transportation infrastructure construction (e.g., Chongqing Jiangbei International Airport T3B Terminal and Fourth Runway Project Airfield Engineering)[28] Scientific Research Achievements and Awards This section highlights the company's scientific research progress and accolades in the first half of 2025, including R&D investment, technology platform development, and intellectual property achievements H1 2025 Scientific Research Progress In H1 2025, the company achieved notable progress in R&D projects, technology platform development, and intellectual property, accumulating RMB 347 million in R&D expenses for 2024 and obtaining 35 new patents - Awarded 19 provincial construction industry scientific and technological progress awards, 12 new technology application demonstration projects, and 2 green construction technology demonstration projects[29] - 9 achievements were evaluated as domestically leading, 4 scientific and technological achievements passed provincial construction association acceptance, and 3 achievements were evaluated as domestically leading[29] - Accumulated RMB 347 million in R&D expenses for 300 enterprise-level scientific research projects in 2024[29] - As of the end of June 2025, 35 new patents were granted (including 8 invention patents), and 21 new patent applications were filed[29] Future Outlook This section outlines the company's strategic priorities and key initiatives for the second half of the year, focusing on sustainable development and enhancing shareholder value Key Tasks for H2 The company will continue to focus on building quality platforms, stimulating organizational vitality, improving project quality, and strengthening safety management in H2 to achieve sustainable development and shareholder returns - Continuously build high-quality enterprise platforms, leveraging the Group's 73 years of accumulated brand reputation, qualifications, performance, financial credit, and talent reserves[31] - Continue to activate the vitality of all organizational levels, encouraging innovation and entrepreneurship across the industry value chain to identify new economic growth points[31] - Continuously improve project quality, deeply carry out special governance for common quality issues, promote quality management standardization, and actively create high-quality projects at all levels[32] - Maintain constant vigilance regarding production safety, continuously strengthen safety education and publicity, and ensure stable safety production throughout the year by strictly controlling the process[32] Financial Performance Analysis This section provides a detailed analysis of the company's financial performance for the first half of 2025, covering revenue, costs, expenses, and profit drivers Revenue, Cost of Sales, and Gross Profit H1 2025 revenue was RMB 7.908 billion, a decrease of approximately RMB 3.107 billion (28%) year-on-year, primarily due to reduced revenue from the construction engineering segment, project completions, and fewer new contracts - H1 2025 revenue was RMB 7.908 billion, a decrease of approximately RMB 3.107 billion, representing a 28% decline[34][5] - The decrease in revenue was mainly due to a RMB 3.174 billion decline in revenue from the construction engineering contracting segment, attributed to the completion of some large projects and a decrease in the contract value and number of newly undertaken projects[34][35] Operating Performance of Construction Engineering Contracting Segment | Segment | 2025 H1 Revenue (RMB billion) | 2025 H1 Gross Margin (%) | 2024 H1 Revenue (RMB billion) | 2024 H1 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Building Construction Business | 4.744 | 5.1 | 6.984 | 5.1 | | Infrastructure Construction Business | 2.218 | 7.8 | 3.099 | 7.1 | | Specialized and Other Construction Business | 0.672 | 5.5 | 0.725 | 5.4 | | Total | 7.634 | 5.9 | 10.808 | 5.7 | Administrative Expenses and R&D Expenses H1 2025 administrative expenses decreased by RMB 89.77 million to RMB 122 million, primarily due to reduced staff costs; R&D expenses decreased by RMB 5.25 million to RMB 27.97 million, mainly due to fewer new projects - Administrative expenses were RMB 122 million, a decrease of RMB 89.77 million compared to H1 2024, mainly due to reduced staff salaries, welfare, and social insurance contributions[37] - R&D expenses were RMB 27.97 million, a decrease of RMB 5.25 million compared to H1 2024, primarily due to fewer new projects initiated[38] Credit Impairment Losses and Asset Impairment Losses H1 2025 credit impairment losses increased by RMB 15 million to RMB 92 million due to bad debt provisions for high-risk clients; asset impairment losses reversed RMB 68 million, mainly due to decreased original value of contract assets from lower revenue - Credit impairment losses were RMB 92 million, an increase of RMB 15 million compared to H1 2024, mainly due to the Group's individual provision for bad debts for clients with significant default risks based on their operating conditions[39] - Asset impairment losses reversed RMB 68 million, compared to a reversal of RMB 37 million in H1 2024, primarily due to a decrease in the original value of contract assets resulting from lower revenue in the current period, leading to a reduction in newly provided bad debt provisions for contract assets[41] Investment Income and Income Tax Expense H1 2025 investment income improved to RMB 0.69 million from a loss of RMB 1.9 million in H1 2024, driven by continuous profitability of associates and joint ventures; income tax expense decreased by RMB 7 million to RMB 28 million due to lower pre-tax profit - Investment income was RMB 0.69 million, compared to an investment loss of RMB 1.9 million in H1 2024, mainly due to the continuous profitability of strategically invested associates and joint ventures[42] - Income tax expense was RMB 28 million, a decrease of RMB 7 million compared to the prior year, primarily due to a reduction in pre-tax profit for the current period[43] Net Profit Overall, H1 2025 net profit was RMB 95 million, a decrease of approximately RMB 26 million year-on-year - H1 2025 net profit was RMB 95 million, a decrease of approximately RMB 26 million compared to the prior year[44] Liquidity, Financial Resources, and Capital Structure This section analyzes the company's cash position, funding strategies, changes in receivables and payables, and key financial ratios, providing insights into its financial health and capital management Cash and Cash Equivalents and Financial Policy As of June 30, 2025, cash and cash equivalents were RMB 4.315 billion, a decrease of RMB 1.435 billion from year-end 2024, mainly due to net cash outflow from operating activities; the company will fund operations through operating cash and interest-bearing borrowings - As of June 30, 2025, cash and cash equivalents were RMB 4.315 billion, a decrease of RMB 1.435 billion from year-end 2024, primarily due to net cash outflow from operating activities[46] - The company will fund its operations through cash generated from operating activities and interest-bearing borrowings, striving to maintain an optimal liquidity level to meet working capital requirements[47] Receivables and Contract Assets/Liabilities Receivables financing decreased by RMB 77 million due to a preference for bank deposits; net accounts receivable decreased by RMB 275 million; net contract assets decreased by RMB 1.674 billion, mainly due to project settlements based on performance progress - Receivables financing was RMB 29 million, a decrease of RMB 77 million compared to year-end 2024, mainly because the Group preferred bank deposit settlements over bank acceptance bills issued by real estate enterprises during the reporting period[49] - Net accounts receivable was RMB 7.052 billion, a decrease of approximately RMB 275 million compared to year-end 2024[50] - Net contract assets were RMB 39.467 billion, a decrease of approximately RMB 1.674 billion compared to year-end 2024, primarily due to engineering settlements for related construction contracts based on performance progress[52] Borrowings and Accounts Payable As of June 30, 2025, total interest-bearing borrowings were approximately RMB 5.920 billion, a slight decrease; accounts payable decreased by RMB 2.883 billion due to reduced project volume; bills payable increased by RMB 432 million due to adjusted payment structure - As of June 30, 2025, interest-bearing borrowings were approximately RMB 5.920 billion (December 31, 2024: approximately RMB 6.056 billion)[54] - Accounts payable balance was RMB 29.464 billion, a decrease of RMB 2.883 billion (9%) compared to year-end 2024, mainly due to a decrease in procurement volume resulting from reduced project volume in the current period[55] - Bills payable balance increased by RMB 432 million compared to the prior year-end, primarily because the Group diversified its payment methods, adjusted its payment structure, and increased the proportion of bill payments[55] Financial Ratios As of June 30, 2025, both current and quick ratios remained at 1.10x; the gearing ratio decreased from 94.8% at year-end 2024 to 91.5%; return on assets and return on equity both declined Key Financial Ratios | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Ratio (x) | 1.10 | 1.10 | | Quick Ratio (x) | 1.10 | 1.10 | | Gearing Ratio | 91.5% | 94.8% | | Return on Assets (Non-annualized) | 0.2% | 0.3% | | Return on Equity (Non-annualized) | 1.5% | 2.5% | Other Information This section covers other important aspects of the company's operations, including material events, contingent liabilities, exchange rate risks, subsequent events, dividend policy, and corporate governance practices Material Matters and Contingent Liabilities During the reporting period, the company had no material acquisitions or disposals of subsidiaries, associates, or joint ventures, nor any significant investments; as of June 30, 2025, contingent liabilities from pending litigation or arbitration amounted to RMB 35 million - During the reporting period, the company had no material acquisitions or disposals of subsidiaries, associates, or joint ventures[59] - As of June 30, 2025, the company held no significant investments[60] - As of June 30, 2025, the company's contingent liabilities arising from pending litigation or arbitration amounted to RMB 35 million[61] Exchange Rate Risk and Subsequent Events The company's business and bank loans are primarily denominated in RMB, posing no significant foreign exchange risk, and currently, there is no hedging policy; as of the announcement date, there are no material subsequent events - The company's vast majority of business and all bank loans are transacted in RMB, thus posing no significant foreign exchange fluctuation risk, and currently, there is no hedging policy against foreign exchange risk[63] - As of the date of this announcement, the company has no material subsequent events[64] Dividends and Corporate Governance The Board does not recommend an interim dividend for H1 2025; the company is committed to maintaining high corporate governance standards, with an effective framework and compliance with the Corporate Governance Code - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[65][94] - The company is committed to achieving and maintaining a high level of corporate governance, has established an effective corporate governance structure, and strives to continuously improve its internal controls and corporate governance mechanisms[66] - During the reporting period, the company complied with all code provisions of the Corporate Governance Code[66] - The Audit Committee has reviewed and confirmed the Group's interim results announcement and unaudited interim financial statements for the six months ended June 30, 2025[69] Notes to Interim Consolidated Financial Statements This section provides detailed notes to the interim consolidated financial statements, including the balance sheet, income statement, and specific accounting policies and analyses Interim Consolidated Balance Sheet As of June 30, 2025, total assets were RMB 58.379 billion, a decrease of approximately RMB 3.456 billion from year-end 2024; both current assets and liabilities decreased, while total equity attributable to owners slightly increased Summary of Interim Consolidated Balance Sheet | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Total Current Assets | 51,974,532 | 55,394,965 | (3,420,433) | | Total Non-current Assets | 6,404,694 | 6,440,070 | (35,376) | | Total Assets | 58,379,226 | 61,835,035 | (3,455,809) | | Total Current Liabilities | 48,916,624 | 52,260,750 | (3,344,126) | | Total Non-current Liabilities | 2,990,177 | 3,184,339 | (194,162) | | Total Liabilities | 51,906,801 | 55,445,089 | (3,538,288) | | Total Equity Attributable to Owners of Parent | 6,313,679 | 6,221,833 | 91,846 | | Non-controlling Interests | 158,746 | 168,113 | (9,367) | | Total Equity | 6,472,425 | 6,389,946 | 82,479 | Interim Consolidated Income Statement H1 2025 operating revenue was RMB 7.908 billion, net profit was RMB 95.24 million, net profit attributable to owners was RMB 104.61 million, and basic EPS was RMB 0.06, all showing year-on-year decreases Summary of Interim Consolidated Income Statement | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-Year Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Operating Revenue | 7,908,202 | 11,015,171 | (3,106,969) | | Cost of Sales | 7,403,489 | 10,365,625 | (2,962,136) | | Operating Profit | 122,653 | 157,082 | (34,429) | | Total Profit | 123,188 | 155,973 | (32,785) | | Income Tax Expense | 27,944 | 35,094 | (7,150) | | Net Profit | 95,244 | 120,879 | (25,635) | | Net Profit Attributable to Owners of Parent | 104,611 | 126,889 | (22,278) | | Basic and Diluted Earnings Per Share (RMB/share) | 0.06 | 0.07 | (0.01) | Notes to Financial Statements The notes detail the basis of financial statement preparation, aging analysis of accounts and long-term receivables/payables, revenue composition and recognition, and calculation methods for income tax and EPS - The financial statements are prepared in accordance with Accounting Standard for Business Enterprises No. 32 – Interim Financial Reporting issued by the Ministry of Finance and the disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[77] Aging Analysis of Accounts Receivable | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 6,509,814 | 6,294,717 | | 1 to 2 years | 813,467 | 1,156,111 | | 2 to 3 years | 501,549 | 501,379 | | Over 3 years | 933,635 | 987,408 | | Total (before impairment provision) | 8,758,465 | 8,939,615 | | Less: Provision for bad debts on accounts receivable | 1,706,471 | 1,612,871 | | Total (Net Value) | 7,051,994 | 7,326,744 | Aging Analysis of Accounts Payable | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 18,318,232 | 20,640,524 | | 1 to 2 years | 8,526,684 | 8,877,374 | | 2 to 3 years | 1,551,425 | 1,521,756 | | Over 3 years | 1,067,217 | 1,306,994 | | Total | 29,463,558 | 32,346,648 | Composition of Operating Revenue | Revenue Type | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Principal Business Revenue | 7,633,670 | 10,808,378 | | Other Business Revenue | 274,532 | 206,793 | | Total | 7,908,202 | 11,015,171 | - Operating revenue is primarily recognized over time (construction services, sewage and reclaimed water treatment), with some recognized at a point in time (sale of goods)[86][87] Definitions This section provides definitions for key terms and abbreviations used in the report, including currencies, company entities, accounting standards, regulatory bodies, and share types, to ensure clear understanding of the report content Definitions of Key Terms This section provides definitions for key terms and abbreviations used in the report, including currencies, company entities, accounting standards, regulatory bodies, and share types, to ensure clear understanding of the report content - Currencies used in the report include Hong Kong Dollars (HKD), the lawful currency of Hong Kong, and Renminbi (RMB), the lawful currency of the PRC[96][98] - Definitions are provided for the Company (Hebei Construction Group Corporation Limited), the Group (the Company and its subsidiaries), H shares, and other entities and share types[97] - References are made to China Accounting Standards for Business Enterprises, the Listing Rules, the Corporate Governance Code, and other regulatory and accounting standards[97][98]