CHINA STATE CON(HK:03311) GF SECURITIES·2026-03-30 14:25Investment Rating - The report maintains a "Buy" rating for the company, with a current price of HKD 8.40 and a fair value of HKD 11.25 [4]. Core Insights - The company's performance is stable and meets expectations, with significant growth in orders from mainland China driven by MiC (Modular Integrated Construction) [2][8]. - The company reported a revenue of RMB 100.449 billion for 2025, a decrease of 4.6% year-on-year, while the operating profit was RMB 8.588 billion, an increase of 0.3% year-on-year [8]. - New contract value for 2025 was RMB 170.21 billion, down 11.9% year-on-year, with a backlog of RMB 364.68 billion at the end of 2025 [8]. Summary by Sections Revenue Forecast - The company forecasts revenues of RMB 105.323 billion in 2024, decreasing to RMB 100.449 billion in 2025, with a slight recovery expected in subsequent years [3][14]. - Revenue growth rates are projected at -7.4% for 2024 and -4.6% for 2025, with a gradual increase in the following years [23]. Profitability Metrics - The company expects EBITDA of RMB 15.589 billion in 2024, decreasing to RMB 14.434 billion in 2025 [3]. - Net profit attributable to shareholders is projected to be RMB 8.565 billion in 2024, slightly increasing to RMB 8.588 billion in 2025 [3][23]. - The company’s EPS is expected to be RMB 1.70 in 2024, decreasing to RMB 1.63 in 2025 [3]. Order Book and Growth - New signed contracts are expected to total RMB 1,933 billion in 2024, decreasing to RMB 1,702 billion in 2025, with a recovery anticipated in subsequent years [11]. - The mainland China segment is expected to see significant growth, with new contracts projected to increase by 15% in 2026 and 10% in 2027 [9]. Cash Flow and Dividends - The company reported a net cash inflow from operating activities of RMB 10.53 billion in 2025, down from the previous year [8]. - The expected dividend per share for 2025 is HKD 0.625, reflecting a payout ratio of 35.5% [8]. Market Position and Future Outlook - The company is well-positioned to benefit from infrastructure investments in the Northern Metropolis area of Hong Kong, with expectations of improved business performance in the region [8]. - The MiC business is gaining recognition in first-tier cities, contributing to a positive outlook for future orders [8].