HTSC·2026-03-31 11:02Investment Rating - The investment rating for the company is "Buy" for both A and H shares [7] Core Views - The company reported a revenue of 1,029.784 billion RMB for 2025, a year-on-year decrease of 3.50%, and a net profit attributable to shareholders of 18.363 billion RMB, down 17.34% year-on-year [1] - The company is shifting towards high-quality development, focusing on asset consolidation, cost optimization, and improving operational quality, which is beginning to show results [1] - The real estate sector continues to be a drag on performance, while international operations have shown significant improvement, with overseas new contracts signed amounting to 363.3 billion RMB, a year-on-year increase of 16.46% [2] Revenue and Profitability - The company achieved revenues of 9,067 billion RMB from engineering contracting, 169 billion RMB from design consulting, 244 billion RMB from industrial manufacturing, 666 billion RMB from real estate development, and 746 billion RMB from material logistics in 2025, with only the industrial manufacturing segment showing growth [2] - The overall gross margin decreased to 9.72%, down 0.55 percentage points year-on-year, with the real estate sector's gross margin continuing to decline [2] - The company’s operating cash flow turned positive in 2025, with a net cash flow from operating activities of 2.957 billion RMB [3] Dividend and Future Plans - The company plans to distribute a cash dividend of 3 RMB per share for 2025, resulting in a dividend payout ratio of 25.5%, translating to an estimated dividend yield of approximately 4.3% for A shares [4] - For 2026, the company aims for a new contract target of 30,000 billion RMB and revenue of 10,016 billion RMB, while controlling costs and taxes at 9,720 billion RMB [4] Earnings Forecast and Valuation - The adjusted net profit forecast for 2026-2028 is 17.3 billion RMB, 17.2 billion RMB, and 17.6 billion RMB respectively, with corresponding EPS of 1.27, 1.26, and 1.29 RMB [5] - The target price for A shares is set at 8.89 RMB and for H shares at 6.47 HKD, based on a valuation of 7x and 4.5x PE for 2026 [5]