Company Coverage
China State Construction Engineering Corporation (601668 CH): 1H26: 2Q26 Net Profit Down 40.7%; Targets yoy Improvement In OCF And Lower Impairment In 2H26
HOLD (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Rmb4.33
Rmb4.90
+13.2%
Rmb5.38
Analyst
Analyst
Highlights
1H26 attributable net profit fell 24.3% yoy to Rmb23.0b. 2Q26 alone fell 40.7% yoy. A 32% increase in impairment was the major drag.
For 2026, management guides: a) yoy improvement in OCF, b) impairment will be no higher than 2025, and c) stable dividend.
Maintain HOLD with a lower target price of Rmb4.90 on lower EBITDA.
Analysis
Net profit fell 24.3% yoy in 1H26, with a weaker 2Q. China State Construction Engineering Corporation’s (CSCEC) 1H26 attributable net profit declined 24.3% yoy to Rmb23.0b. 2Q26 attributable net profit fell 40.7% yoy to Rmb9.1b. Revenue dropped 12.0% yoy to Rmb975.8b but with a 0.9ppt improvement in gross profit margin. A 32% yoy increase in impairment and sharp decline in investment income were the major drags on earnings. Net gearing was 66% as of Jun 26, +1.7ppt hoh and -0.3ppt yoy. No interim dividend was declared.
Highlights
1H26 attributable net profit fell 24.3% yoy to Rmb23.0b. 2Q26 alone fell 40.7% yoy. A 32% increase in impairment was the major drag.
For 2026, management guides: a) yoy improvement in OCF, b) impairment will be no higher than 2025, and c) stable dividend.
Maintain HOLD with a lower target price of Rmb4.90 on lower EBITDA.
Analysis
Net profit fell 24.3% yoy in 1H26, with a weaker 2Q. China State Construction Engineering Corporation’s (CSCEC) 1H26 attributable net profit declined 24.3% yoy to Rmb23.0b. 2Q26 attributable net profit fell 40.7% yoy to Rmb9.1b. Revenue dropped 12.0% yoy to Rmb975.8b but with a 0.9ppt improvement in gross profit margin. A 32% yoy increase in impairment and sharp decline in investment income were the major drags on earnings. Net gearing was 66% as of Jun 26, +1.7ppt hoh and -0.3ppt yoy. No interim dividend was declared.
HOLD (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Rmb4.33
Rmb4.90
+13.2%
Rmb5.38
Analyst
Analyst
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