Investment Rating - The report initiates coverage with a "Buy" rating for the company [9][8] Core Viewpoints - The company is positioned for growth under the support of its major shareholder, the Jianfa Group, which enhances its operational platform and opportunities for development [8][9] - The company is actively seeking transformation opportunities in urban renewal and business extension, aligning with national policies promoting urban development [49][8] - The construction business is expected to grow significantly, with projected revenues and profits increasing over the next few years, reflecting resilience in a challenging market [9][7] Summary by Sections Company Overview - Jianfa Hecheng, established in 1995, specializes in engineering supervision, design consulting, and project management, and was listed on the Shanghai Stock Exchange in 2016 [18] - The company became controlled by the Xiamen State-owned Assets Supervision and Administration Commission after Jianfa Group acquired a 29.01% stake in 2021 [18] Business Expansion - The company has rapidly expanded its construction business, with revenues from this segment reaching 57 billion yuan in 2024, accounting for 86.2% of total revenue [24][22] - The construction business has seen a significant increase in revenue share from 30.2% in 2022 to 86.2% in 2024, indicating a strategic shift towards this area [24][22] Financial Data and Profit Forecast - Projected total revenue for 2025 is 9.371 billion yuan, with a year-on-year growth rate of 41.8% [7] - Expected net profit for 2025 is 122 million yuan, reflecting a growth rate of 27.4% [7] - The company’s earnings per share are projected to be 0.47 yuan in 2025, with a corresponding price-to-earnings ratio of 23X [9][7] Market Opportunities - The urban renewal initiative is anticipated to become a new growth engine for the construction industry, as the market transitions from new construction to renovation and maintenance of existing structures [49][8] - The company is actively pursuing mergers and acquisitions to expand its capabilities in new materials and technologies, enhancing its competitive edge in the evolving market landscape [48][8] Investment Analysis - The report estimates a market value of approximately 40 billion yuan for the company based on a conservative price-to-earnings multiple of 25.0X for 2027, indicating a potential upside of 34% from the current market capitalization of 28.3 billion yuan [9][8]