Sino-Thai International released a research report reiterating the "buy" rating of China Construction Industrial (00830), with a target price of HK $3.31. Recently, the company announced that it will sell the non-core business of project supervision to China Sea Properties (02669) in the parent company at a price of 950 million yuan. Subject to the approval of the EGM, the deal is expected to be completed within 2023. This transaction can bring it a profit of 530 million yuan, realize the release of value, and help the company develop the main business of curtain wall engineering. The bank expects the company to continue to sell non-core assets.
According to the report, China Construction Industrial 3Q23 revenue rose 30.1% year-on-year, revenue in the first three quarters of 2023 rose 25.5% year-on-year to 6.41 billion yuan (HK $, the same below), operating profit rose 35.8% year-on-year to 660 million yuan, operating profit rose 0.8% year-on-year. In the third quarter, the company accelerated the signing of new projects, and the amount of new contracts signed rose 15.8% from the same period last year to 2.39 billion yuan, up from 10.2% in the first half of 2023. The new curtain wall projects include the Hong Kong Airport Authority Space Gallery, Hong Kong New World Huangchu Hang Phase 5, Beijing, Shenzhen and other projects. In the first three quarters of 2023, the total value of newly signed contracts increased by 11.6% to 9.01 billion yuan compared with the same period last year. As of September 30, 2023, the amount of outstanding contracts on hand was 16.01 billion yuan, an increase of 15.5% over the same period last year.