China Construction (601668) 2018 Annual Report Comments: Strong Construction Power and Strong Profitability

China Construction (601668) 2018 Annual Report Comments: Strong Construction Power and Strong Profitability

Fourth quarter revenue performance 杭州夜生活网 accelerated significantly.

The company achieved operating income of 11993 in 2018.

200 million, an increase of 13 in ten years.

8%; net profit attributable to mother 382.

40,000 yuan, an increase of 16 in ten years.

1%, in the range of 10% -20% before the performance forecast, in line with expectations.

Looking at Q1-Q4, quarterly revenue increased by 15 each quarter.

0% / 9.

8% / 2.

4% / 26.

7%; net profit attributable to mothers increased by 15.

0% / 0.

4% / 5.

4% / 52.


The fourth quarter revenue and performance accelerated significantly, mainly due to the acceleration of housing construction revenue in the fourth quarter and the growth and growth of various business gross margins.

The company plans to realize the new contract value in 20192.

8 trillion yuan, an annual increase of 7%, operating income1.

3 trillion yuan, an increase of 6% in ten years.

The dividend distribution plan is planned to be distributed for every 10 shares.

68 yuan, dividend rate of 18%, the current merger corresponds to a dividend rate of 2.


  The growth rate of the housing construction business hit a five-year high, and the proportion of infrastructure construction continued to increase.

In terms of different sections, the housing construction business realized operating income of 72.42 million yuan in 2018, an increase of 15 years.

9%, the highest growth rate in the past five years, a new high in the fourth quarter, a single quarter growth of 45.

6%, a significant acceleration; the infrastructure business realized operating income of 276.7 billion yuan, a year-on-year increase of 19.

8%, the proportion increased by 1.

2 pct to 23.

1%; real estate business realized operating income of 1841 ppm, a year-on-year increase of 2.

7%, settlement is slow, but the sales in this period increased significantly by 32%, too much resources to be settled, and subsequent revenue is expected to accelerate.

The growth rate of infrastructure business in 2018 improved, but it was still higher than the overall revenue growth rate, and its proportion continued to increase, and its business structure was further optimized.

  The gross profit margin increased and cash flow improved significantly.

The company’s comprehensive gross profit margin for 2018 was 11.

9%, a significant increase over the same period last year1.

The 4 pcts were mainly due to the expansion of the target business’s gross profit margin expansion and the increase in the proportion of high gross margin infrastructure business. Among them, the gross profit margin of the housing construction / infrastructure / real estate business increased by +1.

1 / + 0.

7 / + 5.
Period expense ratio 4.

2%, an increase of 1 percentage point from the same period of the previous year, in which the sales / management (plus R & D) / financial expense ratios respectively changed -0.

03 / + 0.

64 / + 0.

With 34 pcts, the increase in management expense ratio was mainly due to the increase in research and development and the increase in the number of employees; the increase in financial expense ratio was mainly due to the increase in financing costs and the increase in factoring business volume.

Asset impairment losses (including credit impairment) are accrued by US $ 3.4 billion each year, mainly due to the increase in provision for bad debt losses; investment income increased by US $ 1.2 billion over the previous year.

Net interest rate rose by 0.

06 pct, which is 3.


The company’s net operating cash flow was 103 trillion, a net decrease of 43.5 billion U.S. dollars in the same period in 2017. The improvement in cash flow was mainly due to better sales of land sales, and the increase in land acquisition expenditure in the same period of 17 years.

The cash-to-cash / cash-to-cash ratio is 104% / 114%, respectively, and then changes by +3.

5 / + 3.


  Housing construction efforts have led to a pick-up in order growth. Real estate sales in January-February this year.

The new contract value of the company’s construction business in 2018 / January to February this year was 23233/3432 trillion, with a long-term growth of 4.

6% / 13.


Among them, in the January / February 2018 / this year, the housing construction business was newly signed US $ 16,824 / 3077 billion, an increase of 14 a year.

1% / 53.

6%, driving the overall order growth rate to continue to pick up; in 2018 / January to February this year, the infrastructure business was newly signed 6282/345 million, shifting changes -14.

4% /-65.

7%; The newly started areas in 2018 / January to February this year were 360.28 / 49.51 million square meters, with a long-term growth of 11.

5% / 7.


The company’s real estate business achieved a contract budget of 3012 million in 2018, an annual increase of 31.

8%, contracted sales area of 19.12 million square meters, an annual increase of 19.

3%; contract budget of 429 trillion was achieved in January-February this year, down 4 a year.

2%, the contracted sales area is 2.3 million square meters, which has dropped 23 times.

1%, the potential for improvement in initial sales growth.

In 2018, the company actively acquired land, newly acquired land of 32.67 million square meters, an increase of 17% each year; in the first two months of this year, 740,000 square meters of newly acquired land decreased by 82%, and the speed of land acquisition also improved.

  Investment suggestion: It is expected that the company’s EPS for 2019-2021 will be 1.



24 yuan, an increase of 12.

2% / 10.

4% / 9.

7%, the current sustainable corresponding PE for three years is 6 respectively.


1 times.
At present, the upward trend of infrastructure investment is obvious, and the company has a significant advantage of undervaluation, and maintains a “Buy” rating.

  Risk Warning: The improvement of financing environment does not meet expected risks, real estate budget risks, overseas operation risks, and policy effects do not meet expected risks.