Company Coverage
China State Construction Engineering Corporation (601668 CH) - 9M26: Net Profit Down 27.4%; Committed To Stable DPS
HOLD (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Rmb4.65
Rmb4.88
+5.0%
Rmb4.90
Analyst
Analyst
Highlights
- 9M26 attributable net profit fell 24.8% yoy to Rmb28.7b on lower revenue and higher R&D, SG&A and impairment cost ratios. The construction segment improved with margin expansion and a return to order growth in 3Q26.
- Management reiterates targets of stable DPS, higher positive OCF and stable impairment for 2026. The stake purchase programme will continue.
- Maintain HOLD with a largely unchanged target price of Rmb4.88.
Analysis
Net profit fell 24.8% yoy in 9M26 and 26.7% in 3Q26. China State Construction Engineering Corporation's (CSCEC) 9M26 attributable net profit declined 24.8% yoy to Rmb28.7b, and 3Q26 attributable net profit fell 26.7% yoy to Rmb5.7b. 3Q26 revenue dropped 20.0% yoy, led by housing construction. Gross profit margin rose 1.0ppt yoy to 9.7% in 9M26, supported by margin improvement of housing and infrastructure construction. However, impairment/SG&A/R&D to revenue ratios rose 0.25ppt/0.25ppt/0.12ppt yoy respectively, resulting in 0.3ppt yoy decline in net margin. Net gearing rose 3.0ppt yoy to 69.7% as of Sep 26..
Highlights
- 9M26 attributable net profit fell 24.8% yoy to Rmb28.7b on lower revenue and higher R&D, SG&A and impairment cost ratios. The construction segment improved with margin expansion and a return to order growth in 3Q26.
- Management reiterates targets of stable DPS, higher positive OCF and stable impairment for 2026. The stake purchase programme will continue.
- Maintain HOLD with a largely unchanged target price of Rmb4.88.
Analysis
Net profit fell 24.8% yoy in 9M26 and 26.7% in 3Q26. China State Construction Engineering Corporation's (CSCEC) 9M26 attributable net profit declined 24.8% yoy to Rmb28.7b, and 3Q26 attributable net profit fell 26.7% yoy to Rmb5.7b. 3Q26 revenue dropped 20.0% yoy, led by housing construction. Gross profit margin rose 1.0ppt yoy to 9.7% in 9M26, supported by margin improvement of housing and infrastructure construction. However, impairment/SG&A/R&D to revenue ratios rose 0.25ppt/0.25ppt/0.12ppt yoy respectively, resulting in 0.3ppt yoy decline in net margin. Net gearing rose 3.0ppt yoy to 69.7% as of Sep 26..
HOLD (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Rmb4.65
Rmb4.88
+5.0%
Rmb4.90
Analyst
Analyst
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