Investment Rating - The report initiates coverage with a "Buy" rating for China Railway Construction Corporation (CRCC) [8][33] Core Insights - The report highlights that the construction industry is expected to stabilize in 2026, supported by local government debt management and the implementation of key national projects [7][14] - CRCC's new contract signing has shown marginal improvement, with a robust backlog of orders ensuring steady long-term growth [7][17] - The company's balance sheet is continuously improving, with enhanced cash flow and optimized accounts receivable aging structure [7][21] - The H-shares of CRCC are trading at a significant discount compared to A-shares, making them more attractive from a dividend yield perspective [7][25] - The report projects CRCC's net profit for 2025-2027 to be RMB 21.4 billion, RMB 21.7 billion, and RMB 22.2 billion respectively, with corresponding P/E ratios of 3.1X, 3.2X, and 3.1X [7][29] Financial Data and Profit Forecast - Revenue projections for CRCC are as follows: - 2023: RMB 1,137.99 billion - 2024: RMB 1,067.17 billion - 2025E: RMB 1,092.29 billion - 2026E: RMB 1,114.13 billion - 2027E: RMB 1,133.25 billion - The expected growth rates are 3.80%, -6.22%, 2.35%, 2.00%, and 1.72% respectively [3][30] - Net profit attributable to ordinary shareholders is forecasted as follows: - 2023: RMB 26.10 billion - 2024: RMB 22.22 billion - 2025E: RMB 21.41 billion - 2026E: RMB 21.69 billion - 2027E: RMB 22.23 billion - The corresponding growth rates are -2.19%, -14.87%, -3.62%, 1.30%, and 2.51% [3][30] Market Data - As of December 15, 2025, CRCC's closing price is HKD 5.51, with a market capitalization of HKD 748.23 billion [4][8] - The H-shares are trading at a P/E ratio of 3.6X and a P/B ratio of 0.25X, indicating a significant discount compared to A-shares [7][25] Order and Contract Insights - CRCC's cumulative new contract amounts from 2021 to 2025Q3 are as follows: - 2021: RMB 2.82 trillion - 2022: RMB 3.25 trillion - 2023: RMB 3.29 trillion - 2024: RMB 3.04 trillion - 2025Q1-3: RMB 1.52 trillion - The new contract signing has shown a year-on-year growth of 10.39%, 15.09%, 1.51%, -7.80%, and 3.08% respectively [7][17]
中国铁建（01186）：报表优化，分红提升，估值修复