Xin Lang Cai Jing·2025-09-02 04:35Core Viewpoint - The company reported a decline in net profit and revenue for the first half of 2025, aligning with expectations, while maintaining a "buy" rating for future profitability forecasts [1][3]. Financial Performance - In H1 2025, the company's revenue was 489.199 billion, a year-on-year decrease of 5.22%, and the net profit attributable to shareholders was 10.701 billion, down 10.09% year-on-year, which met expectations [1]. - The gross margin and net profit margin for H1 2025 were 8.84% and 2.19%, respectively, showing a decrease of 0.28 percentage points and 0.12 percentage points year-on-year [1]. - The total expense ratio was 4.85%, an increase of 0.05 percentage points year-on-year, with sales, management, R&D, and financial expense ratios showing mixed changes [1]. - Asset and credit impairment losses amounted to 2.406 billion, accounting for 0.49% of revenue, an increase of 0.05 percentage points compared to the same period last year [1]. - Quarterly breakdown for Q1 and Q2 2025 showed revenues of 256.762 billion and 232.437 billion, with year-on-year declines of 6.61% and 3.63%, and net profits of 5.151 billion and 5.551 billion, with declines of 14.51% and 5.55% respectively [1]. Business Segments - The engineering contracting business saw a slight decline in revenue, totaling 434.6 billion, down 3.77% year-on-year, with a gross margin of 7.43%, a decrease of 0.13 percentage points [2]. - The real estate segment generated revenue of 20.755 billion, a significant drop of 34.21%, with a gross margin of 9.68%, down 1.76 percentage points [2]. - Domestic revenue was 452.11 billion, down 6.84% year-on-year, while overseas revenue increased by 20.29% to 37.089 billion, with a gross margin of 6.53%, up 0.29 percentage points [2]. Cash Flow and Receivables - The net cash flow from operating activities for H1 2025 was -79.457 billion, a decrease in outflow by 2.219 billion year-on-year [2]. - The cash collection ratio was 97.7%, an increase of 1.62 percentage points compared to the previous year, while accounts receivable increased by 62.191 billion and inventory decreased by 21.07 billion [2]. - The cash payment ratio was 112.9%, up 2.06 percentage points year-on-year, with accounts payable increasing by 63.545 billion and prepayments rising by 2.32 billion [2]. Investment Outlook - The company maintains its profit forecast for 2025-2027, expecting net profits of 21.4 billion, 21.7 billion, and 22.2 billion, with growth rates of -3.6%, +1.3%, and +2.5% respectively, corresponding to a PE ratio of 5X for each year [3].