Jinwu Financial News | According to Guosheng Securities Research, China Construction International (03311) is the only Hong Kong and Macau construction business platform under China Construction Group. Since 2008, it has entered the mainland market to develop investment projects such as BT and PPP. The mainland's revenue/performance share has continued to increase, reaching 58%/81% in 2023. The company's revenue/performance CAGR for 2013-2023 reached 15%/13% (up 11.5%/15.1% in 2023). In recent years, it has maintained steady growth under the influence of macroeconomic disturbances and declining real estate, etc., and has strong operational resilience. Furthermore, indicators such as comprehensive gross profit margin and net interest rate are significantly superior to other leading construction central state-owned enterprises, and its profitability is excellent.
According to the bank, the integration of Guangdong, Hong Kong and Macao has continued to accelerate in recent years, driving an upward trend in demand for connectivity infrastructure. In 2023, about 675.8 billion yuan of major projects in Guangdong Province will be invested in the Greater Bay Area. In April 2021, Hong Kong proposed a development strategy for the northern metropolitan area, and released the “Action Plan” in October 2023. It plans to vigorously develop the northern metropolitan area within the next 10-20 years. It is expected to contribute HK$3 trillion in investment. It is expected that more than 500,000 new residential units will be added, and demand for housing construction will continue to be strong. The company is a leading engineering leader in Guangdong, Hong Kong and Macau. The market share in Hong Kong is about 15%, and Macau's market share exceeds 50% for three consecutive years. The leading position is prominent. In the future, as the integration of the Bay Area accelerates and engineering demand rises, the company's regional orders are expected to continue to increase.
The bank predicts that the company's net profit for 2024-2026 will be HK$106/120/13.4 billion, up 15%/13%/12% year over year, and corresponding EPS of HK$2.10/2.38/2.66, respectively. The current stock price PE is 4.6/4.0/3.6 times, respectively, giving a “buy” rating for the first time.