In the first half of the year, the company’s gross profit was 381 million yuan, a year-on-year increase of 42.7%
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After the implementation of the new strategy, the gross profit margin of the company’s three main businesses achieved large-scale growth
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CSCEC occupies an absolute leading advantage in the local market and is difficult to be surpassed by its competitors
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As the leader of the exterior wall industry in Hong Kong and Macao, CSCEC has ushered in new opportunities for business development
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In the 2021 budget, the Hong Kong government proposed to continue to invest in infrastructure, and in the medium-term financial forecast (2022-2025), the expenditure on basic projects will exceed 100 billion yuan per year, that is, the compound growth rate of expenditure on basic projects in the next five years needs to reach about 15%, The annual gross value of construction projects will increase to about $300 billion
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It can be seen from the above data that CSCEC’s businesses have achieved steady growth
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It is recognized as the most powerful curtain wall company in Hong Kong and Macao
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one In depth implementation of the new strategy and steady growth of various businesses, CSCEC Xingye is one of the overseas listing platforms of “China Construction Department”, which is subordinate to China Construction Group Co., Ltd
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The overall gross profit margin was 14.1%, up 0.5% over the same period, creating a new high in the interim report period in the past five years
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In the first half of the year, the company successively won the bid for a number of large curtain wall projects, such as Shanxi Modao residential project in the western half of the country, Xinghua Street residential project in Changsha Bay, phase II of the Yangtze River Center, Kai Tak Sports Park Indoor Sports Hall (East block and West Block)
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Hong Kong and Macao developed earlier, the market tends to be mature and the competition pattern is relatively clear
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The huge amount of outstanding contracts in hand will continue to be cashed over time, which will then be transformed into the company’s future revenue and profits, driving the release of the company’s performance
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In terms of the business objectives of the 14th five year plan, the turnover and net profit scale exceeded 9 billion and 1 billion respectively during the 14th five year plan, resulting in a compound annual growth rate (CAGR) of 15% and 39% respectively
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With the project expenditure in Hong Kong inclining from civil engineering to public construction, housing and other fields, the demand of curtain wall industry has also ushered in rapid growth
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High end resort hotels (such as Galaxy 4, MGM II, Wynn, etc.) will start one after another
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Author| Rowling data support | On August 16, China Construction Societe Generale, one of the overseas listing platforms of “China Construction Department”, handed over its interim report card
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In terms of scale, CSCEC has ranked among the top three in the global glass curtain wall industry
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In terms of contract orders in hand, according to the company’s disclosure, by the end of the mid-term report in 2021, the company’s total contract amount in hand was about HK $21.068 billion (the same below), of which the outstanding contract amount was about RMB 10.575 billion
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From the perspective of China Construction Industry 2021 interim report and the dismantling of its core capabilities, we will understand that China construction industry with a market value of 10 billion is not a fantasy, but a high probability event
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As of the end of the interim report period, CSCEC’s short-term loan was 567 million, a year-on-year decrease of 14%, and the corresponding financial cost decreased to 4.615 million
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The company implements the business strategy of “expanding Hong Kong and Macao, entering the mainland and shrinking overseas”, and prudently expands other overseas markets such as North America, Australia, the UK and the Asia Pacific region
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Looking through the interim report card handed over by the company: on the whole, CSCEC’s revenue and profit have ushered in growth
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The company’s traditional core business of exterior wall engineering is based on the Hong Kong and Macao market
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In the past two years, under the background of many uncertainties in the international situation, China construction industry has adjusted its strategic development direction
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Once the financial report was issued, the capital market responded quickly and gave positive feedback to the a + financial report
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The infrastructure development in Hong Kong and Macao will bring a blowout in the demand for exterior wall engineering
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According to the data, the whole domestic market capacity is up to 550 billion yuan, while the market capacity of curtain wall industry in Hong Kong and Macao is about 10-12 billion yuan, only about 1 / 50 of the mainland market
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In the Macao market, gambling will expire in 2022, and gambling will be reissued soon
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In combination with the short-term business planning objectives proposed by the company’s management at the performance exchange meeting in March and its business objectives in the 14th five year plan, namely: In terms of short-term business planning, the net profit is expected to maintain an average annual growth of 40-50% in the next 2-3 years
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It is not difficult to find that the first half report card handed over by the company is gradually and effectively confirming the strategic development goal of CSCEC
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the company’s main businesses include exterior wall engineering business (including design, manufacturing, production and installation of curtain wall system), EPC, supervision consulting, investment and operation, etc
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In the Hong Kong market, in 2020, due to the impact of the epidemic, the expenditure plan for infrastructure, sanitation and other basic projects was delayed
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At the same time, the healthy liability side of the company also consolidated the balance sheet during the period, showing strong anti risk and anti volatility ability
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Moreover, the unused bank credit line (including performance guarantee financing, working capital financing and loan financing) is RMB 2.543 billion, which shows that CSCEC has sufficient financial resources to cope with business development and expansion in the future
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Among them, the revenue of Greater China, Asia and other regions was 1.602 billion yuan, accounting for 86.50% of the curtain wall business in the current period, an increase of 42.52% compared with the same period last year
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Thanks to the strategic adjustment, the company’s financial performance has drawn a steady growth curve since last year
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At present, the markets of Hong Kong and Macao once again usher in growth opportunities
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Growth is the eternal proposition of enterprise development
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This difference in gross profit margin shows that overseas business is the main reason restricting the profitability of enterprises
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On that day, CSCEC’s share price soared by 12.87% to RMB 193 million, with a market value of RMB 4.160 billion, a new high in recent seven years
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It is worth mentioning that the mainland market, as the most important part of the company’s strategic adjustment: the mainland market, has become an important carriage driving the company’s development
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In the same period, the accumulated newly signed contract amount of 4.55 billion yuan was obtained, making the annual target of 56.9% complete, no less than 8 billion yuan
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For the specific split: （ 1) Curtain wall business accounting for the largest proportion of revenue: benefiting from the accelerated progress of curtain wall projects in Greater China, the revenue from curtain wall business was HK $1.852 billion, an increase of 41.15% over the same period last year; The operating profit was 150 million, a significant increase of 127.27% compared with the same period last year
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At the same time, in terms of the orders on hand shown by China Daily, it fully shows that the company continues to benefit from the industry development in Hong Kong and Macao
Their total revenue was 851 million yuan, an increase of 31.12% over the same period last year, and their total operating profit was 185 million yuan, an increase of 25% over the same period last year
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This data verifies that the company’s strategy of “expanding Hong Kong and Macao, entering the mainland and shrinking overseas” has been effectively implemented, especially the smooth progress of mainland business, the gradual acceleration of penetration, and sufficient feedback at the performance level
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With sufficient contracts in hand, the mainland market will become an important carriage driving the development of the company From the gross profit margin of each region in 2020, the gross profit margin of overseas, mainland, Hong Kong and Macao are – 35.5%, 5.4% and 11.0% respectively
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Low concentration is the main competitive feature of domestic curtain wall industry.
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The financial report shows that for the six months ended June 30, 2021, the company has achieved a turnover of HK $2.703 billion (the same below: HK $), a year-on-year increase of 37.88%; The gross profit was 381 million yuan, a year-on-year increase of 42.81%; The net profit attributable to shareholders of the company was 226 million yuan, a year-on-year increase of 45.75%; Earnings per share is HK $10.48, and an interim dividend of HK $3 per share is proposed
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（ 2) The two businesses of general contracting engineering and operation management were released steadily to further enrich profits
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