(Original title: Dual Engines of Technology and Market Empowering Development China State Construction & Industrial’s revenue increased by 23.9% year-on-year)
On August 22, 2023, China State Construction Engineering Corporation (0830.HK) released its 2023 interim performance announcement. The announcement shows that in the first half of 2023, China State Construction Engineering Corporation’s operating income was 4.716 billion Hong Kong dollars, a year-on-year increase of 23.9%, and the profit attributable to shareholders was 4.37. billion Hong Kong dollars, a year-on-year increase of 35.7%, and basic earnings per share of 19.36 Hong Kong cents, a year-on-year increase of 29.9%.
With the release of the 2023 mid-year report of China State Construction and Industrial Development Co., Ltd., its outstanding performance has aroused the continuous attention of the capital market. Sinolink Securities and CITIC Securities have successively released company research reports. Among them, the performance of Sinolink Securities Dianping Co., Ltd. is in line with high-growth expectations. Hong Kong, Macau and mainland China are both making efforts, and maintain the “buy” rating; rating.
Sufficient revenue growth momentum, strong performance of curtain wall business
According to the semi-annual report, China State Construction and Industry continued to focus on the main business of curtain walls, continued to give full play to the brand advantages of “Far East Curtain Wall”, and seized market opportunities, innovative technology empowered business development, refined management reduced costs and increased efficiency, benefiting from the good performance of existing projects The company’s core performance indicators have achieved steady growth.
In the first half of 2023, China State Construction & Industrial’s turnover was 4.716 billion Hong Kong dollars, a year-on-year increase of 23.9%. Judging from the contract signing situation, the accumulative value of newly signed contracts during the reporting period reached 6.623 billion Hong Kong dollars, and the 2023 project of no less than 12 billion Hong Kong dollars has been completed. The annual target of 55.2%.
It is worth mentioning that, under the background of the smooth progress of many projects in Hong Kong and Mainland China, the curtain wall business of China State Construction and Development Co., Ltd. achieved a substantial growth of 25.8% in revenue compared with the same period last year, and its operating profit increased by 60.1% compared with the same period of the previous year to 509 million. The Hong Kong dollar has injected strong impetus into the company’s performance growth. In the first half of the year, China State Construction Engineering Corporation won a number of large-scale public buildings and residential curtain wall projects, including Hong Kong Kai Tak Acute Hospital Site A, Prince of Wales Hospital, residence at No. 391 Chai Wan Road, and No. 243 Tai Po Inland Lot, Ma Wo Road, Tai Po residence, etc.
Technological Innovation Empowers Sustained Growth Leading the Industry to Green Building Development
As a world-class leader in high-end curtain wall engineering, China State Construction and Development Co., Ltd. has the world’s leading ultra-high-rise glass curtain wall technology and hyperbolic special-shaped complex curtain wall technology, as well as industry-leading automated production line equipment. Its intelligent manufacturing system can not only improve meticulous management capabilities, but also Continuous improvement of project efficiency and contract performance quality also has important effects. When the demand for curtain walls in Hong Kong and Macau will increase in the future, China State Construction and Industry will further consolidate its leading position by virtue of its technological advantages.
Under the background of extremely fierce homogeneous competition in the low-end market, China Construction Industrial insisted on adopting a differentiated competitive strategy. Relying on the high-end brand “Far East Curtain Wall” and adhering to the high-quality and high-tech route, it successfully won multiple bids in the first half of this year. Large-scale curtain wall projects in the Mainland, including the first phase of Huawei Guangzhou R&D Center, the commercial complex of Lotte Plaza in Chengdu, Sichuan, Huawei Jiuhuashan Industrial Park, and Hangzhou Jianghehui Plot No. 31. In addition, the complex hyperbolic curtain wall technology and self-developed Light A and Light S series BIPV products developed by China State Construction and Industrial Development Co., Ltd. in the Murray Road project in Hong Kong Central also play an important role in the company’s implementation of differentiation strategies and seizing the blue ocean market.
In recent years, the demand for new energy development and urban energy conservation and emission reduction has continued to grow, and the concept of green environmental protection has also received attention in the field of construction engineering. BIPV’s “trillion-level market” is like a sea of stars, attracting companies to “oversize” their layout frequently. Against this background, China State Construction and Development has also increased investment in research and development, focusing on developing the blue ocean market for photovoltaic curtain walls, and leading the industry in the development of green buildings. It is reported that in the first half of this year, China State Construction and Industry has successfully released new products of the Light A series of photovoltaic curtain walls, and the performance of the products has been greatly improved compared with Light S; The project was successfully completed, and the construction of the BIPV trial production line has also been completed.
Business Strategy Continues to Focus on Steady Growth in Hong Kong, Macau and the Mainland Market
In terms of regions, the Hong Kong and Macau markets are highly prosperous. In the first half of 2023, the company’s newly signed contracts will continue to lead the Hong Kong and Macau markets. In terms of public construction, China State Construction Engineering Corporation has obtained large-scale government projects such as Site A of Kai Tak New Emergency Hospital and Prince of Wales Hospital; the company has also maintained good cooperation with many well-known real estate developers such as Swire, Wheelock, and Kerry Properties. In the first half of the year, it won bids for several residential projects. Driven by the continuous expansion of the Hong Kong and Macau markets and the increase in gross profit margin, the profit of the main curtain wall business has increased significantly.
The policy reports released by the Hong Kong government in recent years have all proposed huge construction plans, including increasing land supply through “Lantau Tomorrow” and “Northern Metropolitan Area”: ”Lantau Tomorrow” plans to build a large-scale land reclamation in the west of Hong Kong Island and the east of Lantau Island. The new city will create the third core business district for Hong Kong; the “Northern Metropolitan District” plans to build the northern part of Hong Kong into a metropolitan area with an area of about 300 square kilometers, which can accommodate about 2.5 million people. Driven by large-scale construction plans, new public buildings, commercial buildings, and residential buildings in future urban development will generate a large demand for curtain walls. In addition, special plans such as the first and second “Ten-Year Hospital Development Plan”, “Ten-Year Cultural and Art Facilities Development Blueprint”, and “Ten-Year Sports and Recreational Facilities Development Blueprint” will also bring considerable business opportunities. In terms of the Macau market, in December 2022, the six major gaming companies including Wynn, Galaxy, and Melco signed a new 10-year franchise contract with the Macau government, promising to invest over 100 billion patacas in Macau, and the construction of large-scale gaming hotels involved in the contract The construction of facilities such as conferences, exhibitions and entertainment performances will bring considerable curtain wall business. The implementation of the above-mentioned Hong Kong and Macau construction plan will help to promote the further release of the incremental demand for curtain walls, and the scale of China State Construction & Industrial’s Hong Kong and Macau projects is expected to continue to grow.
In the mainland market, China State Construction & Development has attracted high-quality customers with high-quality solutions, successfully won the bid for Sun Hung Kai’s Hangzhou Jianghehui project, and won an order from the well-known Korean consortium Lotte Group. At the same time, by grasping the construction needs of new economic enterprises, the company has won three consecutive Huawei projects this year. In addition, China State Construction and Industry is actively following up the construction of cultural facilities and large-scale venues in developed cities in the mainland, and the growth of performance in the mainland can be expected in the future.
According to the research report of Sinolink Securities, the output value of the mainland construction curtain wall industry will reach 520 billion yuan in 2021, and it is expected to reach 660 billion yuan in 2025, with broad prospects for growth. At the same time, judging from the data of the six leading companies in the curtain wall industry in the Mainland, the total market share of the six companies in 2021 is only 4.2%, and the remaining share of more than 95% is occupied by other small and medium-sized companies. With the increase in industry concentration, There is huge room for leading companies to further penetrate into the decentralized market. With its rich experience and technical advantages in curtain wall projects, China State Construction & Development is expected to gain more orders and market share in the mainland market.
In the future, in the huge incremental curtain wall market, China State Construction & Development will implement a differentiated competition strategy, improve its technological level, optimize its operation management and business layout, deeply cultivate the Hong Kong and Macau markets, expand high-quality owners in the Mainland, and achieve sustainable and steady development.
Source of this article: Financial Report Network
2023-08-24 01:36:15
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