中国建筑兴业(0830.HK)：静待良机

Core Viewpoint - The company reported a significant decline in total revenue and net profit for FY25, attributed to a sluggish real estate market in Hong Kong, leading to reduced project launches and contract signings [1][2] Group 1: Financial Performance - For FY25 H1, total revenue and net profit decreased by 29.3% and 29.8% respectively, amounting to HKD 3.34 billion and HKD 390 million [1] - Revenue from the Hong Kong and Macau regions fell by 32.3% to HKD 2.07 billion, representing 62.0% of total revenue [1] - New signed contracts for curtain wall projects dropped by 27.9% to HKD 3.84 billion, with contracts in Hong Kong and Macau down by 30.5% to HKD 2.20 billion and HKD 1.48 billion respectively [1] Group 2: Market Conditions - The number of new private residential projects in Hong Kong decreased by 57.0% year-on-year to approximately 6,100 units [1] - The inventory of unsold completed private residential units increased by 42.1% to about 27,000 units as of June this year [1] - The vacancy rate for Grade A office buildings in Hong Kong reached a near-high level of 13.6% in Q2 FY25, with a low completion volume of 462,700 square feet and a net absorption of only 130,700 square feet [1] Group 3: Strategic Developments - The company maintains a focus on high-value cities in mainland China, targeting quality real estate developers and new economy enterprises [2] - In FY25 H1, the company secured three curtain wall projects from Swire Properties and a project from Huawei, indicating a strategic alignment with high-profile clients [2] - The company is also expanding into friendly overseas markets, winning three projects in Singapore, including its first BIPV project at Changi Airport [2] Group 4: Rating Adjustment - Based on the mid-year performance, the company has revised down its net profit forecasts for FY25-26 by 9.7% and 15.6%, while introducing a forecast for FY27 [2] - The target price has been adjusted from HKD 1.93 to HKD 1.75, reflecting a corresponding P/E ratio of 6.0 times FY25 earnings and a potential upside of 17.2% [2] - The rating has been changed from "Buy" to "Hold" due to reduced upside potential [2]