Assessing 1Q Earnings: Net Income and Revenue Highlights for China Communications Construction (1800)

China Communications Construction on Smartkarma

Analyst Coverage of China Communications Construction on Smartkarma

On Smartkarma, analyst Osbert Tang, CFA, recently published research on China Communications Construction (1800 HK), providing a positive outlook on the company. In the report titled “China Comm Const (1800 HK): A Nice Surprise,” Tang highlights that CCCC expects faster new contract and revenue growth for FY24, driven by strategic industries and overseas markets. With a strong contract backlog and improved cash flow, the company aims to narrow its discount to book value. The end-FY23 contract backlog of Rmb3.45trn covering 4.1x of FY24F revenue indicates a secured revenue stream over the coming years.

In another bullish report by Osbert Tang, CFA, titled “China Comm Const (1800 HK): New Contracts Gathering Steam,” the analyst notes the significant growth in new contracts for CCCC. The 4Q23 new contracts increased by 14%, surpassing the 9M23 growth rate, leading to full-year new contracts 3.5% above target. Tang estimates an impressive backlog of Rmb4.26trn by end-FY23, covering 4.9x of FY24F revenue. With market cap management and increased payout ratio as key focus areas, China Communications Construction aims to drive returns and potentially achieve a yield of over 10% as encouraged by CSRC.

A look at China Communications Construction Smart Scores

Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma

China Communications Construction Company Ltd., a transportation infrastructure group, presents a promising long-term outlook based on its Smartkarma Smart Scores. With top scores in Value and Dividend, as well as strong momentum, the company is positioned for potential growth. Additionally, its solid performance in Growth further enhances its overall outlook.

Despite a lower Resilience score, China Communications Construction‘s global operations, coupled with its strengths in value, dividend, and momentum, bode well for its future. Investors may find this company attractive for its stability and growth potential in the infrastructure sector.

Summary of the company:
China Communications Construction Company Ltd. is a transportation infrastructure group. The Company is involved in infrastructure construction, infrastructure design, dredging, and port machinery manufacturing. China Communications has operations worldwide.

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