CSCEC(SH:601668) EBSCN·2025-07-13 12:44Investment Rating - The report maintains a "Buy" rating for China State Construction Engineering Corporation (601668.SH) [1] Core Views - In a low interest rate environment, high dividend strategies continue to perform well, with leading construction companies like China State Construction offering attractive value [5] - As of July 11, 2025, China State Construction's dividend yield is approximately 4.47%, which is higher than the average yield of major banks at 3.88% [5][11] - The company has a price-to-book (PB) ratio of 0.54, indicating a significant undervaluation compared to historical levels [5] - The company has maintained a stable dividend policy, with a cumulative payout ratio of 20.1%, the highest among major state-owned construction enterprises [8] - The company’s new contract signing in the first five months of 2025 reached 1,841.2 billion yuan, showing a year-on-year growth of 1.7% [8] Summary by Sections Financial Performance - The projected net profit for 2025 is 47.49 billion yuan, with a steady growth forecast for the following years [10] - The company’s revenue for 2025 is estimated at 225.77 billion yuan, reflecting a growth rate of 3.23% [10] - The earnings per share (EPS) for 2025 is projected to be 1.15 yuan [10] Dividend Policy - China State Construction has a historical average dividend payout ratio of 20.3%, ensuring predictable returns for shareholders [8] - The company plans to maintain stable dividends in 2025, supporting its major shareholder, China State Construction Group, with consistent cash flow [8] Market Position - The construction industry is characterized by high concentration, with state-owned enterprises like China State Construction having strong bargaining power, which enhances asset safety [6] - The report highlights the ongoing government efforts to address debt issues, with significant allocations for debt resolution and project financing [7] Valuation Metrics - The report indicates that the company’s current valuation metrics, including a PB ratio of 0.54 and a PE ratio of 5, suggest it is undervalued relative to its earnings potential [10][18] - The dividend yield of 4.5% for 2024 is expected to increase to 4.8% by 2027, indicating a favorable return for investors [18]