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Yangtze Business Daily News● Yangtze Business Daily reporter Xu Yang

Construction giant China Construction (601668.SH) continues to operate steadily.

Recently, China Construction announced that the consortium won the bid for the King Salman Knowledge Zone project in Saudi Arabia with a value of US$2.08 billion (approximately RMB 15.11 billion).

From January to June 2024, the total value of newly signed contracts of China's construction industry reached 2.48 trillion yuan, a year-on-year increase of 10%. Among them, the value of newly signed contracts in overseas markets reached 123.1 billion yuan, doubling year-on-year.

The Yangtze Business Daily reporter noted that as the world's largest engineering contractor, China Construction has taken technological innovation as its core driving force to continuously improve quality and efficiency, promote business development and increase profitability. The company's newly signed contract value and operating income have grown steadily.

While maintaining steady business development, China Construction has increased returns to investors and continued to increase cash dividends. Data shows that from 2021 to 2023, the company has paid out dividends of over 10 billion yuan for three consecutive years.

The total amount of newly signed contracts in the first half of the year increased by 10% year-on-year

State-owned enterprise giant China Construction has released positive news to the market.

On the evening of July 11, China Construction issued an announcement on the winning bid for major overseas projects. Recently, the company formed a consortium with Saudi Arabia's El Seif Engineering Contracting Co. Ltd. and received the award letter for the King Salman Knowledge Zone project in Saudi Arabia.

The announcement shows that the project is located in the Diriyah area west of Riyadh, the capital of Saudi Arabia, with a construction area of ​​about 340,000 square meters and a contract cost of approximately US$2.08 billion (equivalent to approximately RMB 15.11 billion). It mainly includes King Salman University, Capella Hotel, Saudi Royal Museum, King Salman Library, King Salman Cultural Plaza and other iconic cultural buildings. It is a major project invested and constructed under Saudi Arabia's "Vision 2030" to further enhance the level of education, culture and tourism in the capital Riyadh.

It is worth mentioning that this project is the second large-scale project undertaken by China Construction for the owner after China Construction Middle East Company signed the Diriyah Gate Infrastructure Project in 2021. It is also another large-scale public construction project undertaken by China Construction in Saudi Arabia after winning the bid for the Saudi E-Sports Arena project in 2023.

China Construction is one of the first batch of enterprises in my country to "go global". The company's operations currently cover more than 100 countries and regions at home and abroad, with business layout covering investment and development (real estate development, construction financing, holding and operation), engineering construction (housing construction, infrastructure construction), survey and design, new business (green construction, energy conservation and environmental protection, e-commerce) and other sectors.

According to the operating situation briefing from January to June 2024, in the first six months of this year, China Construction's new contract value was 2.48 trillion yuan, a year-on-year increase of 10.0%, of which the vast majority were construction business contracts, with an amount of 2.29 trillion yuan; the rest were real estate business contracts, with sales of 191.5 billion yuan. Among the 2.29 trillion yuan of construction business contracts, domestic business was the main one, reaching 2.17 trillion yuan, a year-on-year increase of 10.9%; overseas business was only 123.1 billion yuan, but the year-on-year growth rate was as high as 105.4%.

Looking at the long-term trend, China Construction's overseas operations have maintained steady growth in recent years. The financial report shows that from 2021 to 2023, the company's overseas business new contract value will be 163.6 billion yuan, 165.6 billion yuan, and 186 billion yuan, respectively, and the overseas operating income will be 89.3 billion yuan, 108 billion yuan, and 115.8 billion yuan, respectively. Among them, China Construction's overseas operating income in 2023 is the highest in the past decade.

135.84 billion RMB invested in R&D in 3 years

Looking back at China Construction’s performance in previous years, after its overall listing in July 2009, the company’s performance has generally maintained a steady development trend.

In 2023, China Construction achieved new contract value of 4.32 trillion yuan for the whole year, breaking the 4 trillion mark; operating income was 2.27 trillion yuan, a year-on-year increase of 10.2%. So far, the company's operating income has maintained positive growth for 18 consecutive years; net profit attributable to shareholders was 54.26 billion yuan, a year-on-year increase of 6.5%, ranking first in the industry in terms of profit scale, a record high, nearly eight times the 60.92 in the year of listing; the company ranked 13th in the Fortune Global 500, continuing to maintain its position as the world's largest investment and construction group.

At the beginning of 2024, China Construction's performance achieved a "good start". In the first quarter of 2024, the company achieved operating income of 549.3 billion yuan, a year-on-year increase of 4.7%; and achieved net profit attributable to shareholders of 14.92 billion yuan, a year-on-year increase of 1.2%.

From the perspective of its business segments, housing construction and infrastructure still play the role of "ballast". In the first quarter of 2024, China Construction's housing construction business achieved operating income and gross profit of 365.8 billion yuan and 22.61 billion yuan, respectively, up 6.1% and 6.5% year-on-year; the infrastructure construction and investment business achieved operating income and gross profit of 127.7 billion yuan and 10.92 billion yuan, respectively, up 6.4% and 8.3% year-on-year.

A reporter from the Yangtze Business Daily found that China Construction has been continuously improving its scientific and technological innovation capabilities to maintain its leading position in the industry. As of the end of 2023, the company has 39,443 R&D personnel, accounting for 10.3% of the company's total number of employees. It has won 82 national science and technology awards, 133 civil engineering Zhan Tianyou Awards, edited 100 national and industry standards, and has 68,519 valid patents (including 6,177 invention patents). The number of patents and the level of achievements are leading in the industry.

China Construction continues to maintain high investment in research and development. Choice data shows that since 2021, the company's annual R&D expenditure has exceeded 40 billion yuan, 40.02 billion yuan, 49.75 billion yuan, and 46.07 billion yuan from 2021 to 2023, respectively, totaling 135.84 billion yuan in three years. In the first quarter of 2024, the company's R&D expenses were 6.336 billion yuan.

Looking ahead to 2024, China Construction said it will firmly grasp the primary task of high-quality development, commit to the strategic goal of "one creation and five strengths", implement the "one, six, six" strategic path in depth, build "valuable China Construction", "technological China Construction" and "happy China Construction", and strive to achieve new contract value of more than 4.5 trillion yuan and operating income of more than 2.38 trillion yuan, build more competitive advantages, consolidate more long-term value, and return the company's shareholders and investors with better operating results.

It is worth mentioning that China Construction adheres to a prudent cash dividend policy. Choice data shows that from 2021 to 2023, the company paid out cash of 10.485 billion yuan, 10.597 billion yuan, and 11.298 billion yuan respectively, with cash dividends exceeding 10 billion yuan for three consecutive years. Among them, the cash dividend ratio in 2023 was 20.82%, a six-year high.

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