China Communications Services (0552) AI Stock Analysis

• Market Cap: $33.59B
• Dividend Yield: 5.2%
• Average Volume (3M): 11.46M
• Price to Earnings (P/E): 8.6
• Beta (1Y): 0.65
• Revenue Growth: 1.54%
• EPS Growth: -2.09%
• Country: HK
• Employees: 75,068
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): 0.34
• Shares Outstanding: 2,391,420,200
• 10 Day Avg. Volume: 15,257,161
• 30 Day Avg. Volume: 11,459,669
• PEG Ratio: 0.00
• Price to Book (P/B): 0.65
• Price to Sales (P/S): 0.20
• P/FCF Ratio: 5.77
• Enterprise Value/Market Cap: 0.68
• Enterprise Value/Revenue: 0.15
• Enterprise Value/Gross Profit: 1.31
• Enterprise Value/Ebitda: 7.07
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: HK$5.00 ▲(9.17% Upside)

The overall stock score of 76 reflects a strong financial performance with efficient cash management and a solid balance sheet. The valuation is attractive due to a low P/E ratio and high dividend yield, making it appealing for value and income investors. Technical analysis indicates a neutral trend, with no significant momentum or overbought/oversold signals.

Positive Factors

Strong Balance Sheet

A low debt-to-equity ratio indicates conservative leverage, providing financial stability and flexibility to invest in growth opportunities.

Efficient Cash Flow Management

Strong free cash flow growth supports liquidity and operational investments, ensuring the company can sustain operations and pursue strategic initiatives.

Revenue Growth

Consistent revenue growth reflects the company's ability to expand its market presence and maintain demand for its services, supporting long-term business sustainability.

Negative Factors

Profitability Challenges

Negative EBIT indicates challenges in profitability, which could hinder the company's ability to reinvest in its business and improve shareholder returns.

Low Net Profit Margin

A low net profit margin suggests inefficiencies in cost management, which could impact the company's ability to generate sufficient profits and invest in future growth.

Modest Return on Equity

A modest return on equity indicates limited profitability relative to shareholder equity, potentially affecting investor confidence and capital attraction.

China Communications Services Business Overview & Revenue Model

Company Description

China Communications Services Corporation Limited provides telecommunications support services worldwide. It offers telecommunications infrastructure services, including planning, design, construction, and project supervision for fixedline, mobile, broadband networks, data centers and supporting systems; construction services of ancillary communications networks; and integrated solutions for informatization, as well as intelligentization solutions of industries. The company also provides business process outsourcing services comprising network maintenance and optimization services that include fiber optic and electric cables, mobile base stations, network equipment, and terminals; property management services for customers data centers, cloud computing bases, commercial and residential buildings, high-speed railway stations, airports, etc.; and supply chain services, including logistics and transportation, warehousing and distribution, inspection service and tender agent, digital procurement, repair and disposition to domestic telecommunications operators, government, and enterprises customers. In addition, it offers applications, content, and other services, such as system integration, software development and system support, value-added, and other services. Further, the company provides submarine cable installation and other related services. Additionally, it involved in the distribution of communication products; terminals sales; device distribution services; and distribution and procurement services of IT devices, auxiliary machinery, and equipment. It serves telecommunications operators; and non-telecom operator customers, such as government, construction, transportation, power, and financial institutions, as well as overseas customers. The company was incorporated in 2006 and is headquartered in Beijing, China. China Communications Services Corporation Limited is a subsidiary of China Telecommunications Corporation.

How the Company Makes Money

China Communications Services generates revenue primarily through its telecommunications services, which include the planning, design, construction, and maintenance of communication networks. Key revenue streams consist of contracts with major telecommunications companies for network infrastructure projects, as well as ongoing maintenance and operational services. Additionally, the company earns income from providing information technology services, such as system integration and software development. Significant partnerships with state-owned telecom operators like China Mobile, China Unicom, and China Telecom are crucial to its revenue model, as these relationships enable the company to secure large-scale contracts. Furthermore, the increasing demand for 5G infrastructure and digitalization solutions in China presents growth opportunities that contribute positively to its earnings.

China Communications Services Financial Statement Overview

Summary

China Communications Services presents a robust financial profile with stable growth and efficient cash management. The income statement reflects growth opportunities but highlights challenges in profitability margins. The balance sheet is reinforced by low leverage and a substantial equity base, ensuring financial stability. Cash flow performance is strong, underlined by significant free cash flow growth and effective cash utilization.

Income Statement

The company shows a consistent revenue growth with a 0.93% increase from the previous year. Despite this, there is a notable drop in EBIT margin due to negative EBIT, affecting overall profitability. Gross profit margin remains positive at 11.73%, reflecting operational efficiency, but the net profit margin is 2.40%, indicating room for improvement in cost management.

Balance Sheet

The balance sheet is strong with a low debt-to-equity ratio of 0.04, indicating conservative leverage. The equity ratio is 33.25%, showing a solid equity base relative to assets. However, the return on equity is modest at 7.94%, pointing to potential areas for profitability enhancement.

Cash Flow

Cash flow analysis reveals a healthy free cash flow growth rate of 24.21%, supporting the company's liquidity. The operating cash flow to net income ratio is 1.73, highlighting efficient cash generation from operations. These factors contribute to strong cash flow management and financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	152.53B	150.00B	148.61B	140.75B	133.99B	122.65B
Gross Profit	17.37B	17.60B	17.26B	15.98B	14.78B	13.74B
EBITDA	3.21B	3.42B	5.90B	2.90B	2.62B	2.61B
Net Income	3.61B	3.61B	3.58B	3.36B	3.16B	3.08B
Balance Sheet
Total Assets	138.25B	136.62B	121.79B	110.26B	100.03B	94.49B
Cash, Cash Equivalents and Short-Term Investments	14.24B	25.94B	29.58B	24.54B	26.89B	24.11B
Total Debt	2.03B	2.03B	2.38B	2.46B	2.38B	1.87B
Total Liabilities	90.60B	90.00B	78.12B	68.64B	60.42B	57.30B
Stockholders Equity	46.46B	45.44B	42.58B	40.36B	38.41B	36.72B
Cash Flow
Free Cash Flow	7.77B	5.14B	4.14B	3.68B	2.74B	1.92B
Operating Cash Flow	8.63B	6.22B	5.36B	4.91B	4.51B	5.45B
Investing Cash Flow	-711.27M	-7.17B	-2.12B	-2.29B	-3.67B	-2.24B
Financing Cash Flow	-2.08B	-2.34B	-2.40B	-1.74B	-628.35M	-1.35B

China Communications Services Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.58
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0552, the sentiment is Negative. The current price of 4.58 is below the 20-day moving average (MA) of 4.77, below the 50-day MA of 4.71, and above the 200-day MA of 4.47, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 37.35 is Neutral, neither overbought nor oversold. The STOCH value of 7.57 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0552.

China Communications Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0552	76 Outperform	$33.59B	8.63	8.00%	5.20%	1.54%	-2.09%
0728	76 Outperform	€649.91B	13.81	7.66%	5.36%	0.53%	5.28%
1883	73 Outperform	HK$9.44B	10.30	8.67%	7.34%	-0.62%	-5.10%
0788	72 Outperform	$184.72B	16.35	5.62%	3.98%	3.24%	8.66%
6823	72 Outperform	$87.02B	16.89	14.75%	2.88%	2.33%	2.41%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
0008	49 Neutral	HK$42.86B	-151.37	―	1.65%	4.26%	36.68%

China Communications Services Corporate Events

China Communications Services Restructures Governance, Abolishes Supervisory Committee

China Communications Services Corporation Limited announced the results of its Extraordinary General Meeting held on October 23, 2025. The shareholders approved a special resolution to amend the Articles of Association, abolish the Supervisory Committee, and transfer its duties to the audit committee of the Board. This decision reflects a strategic shift in the company’s governance structure, potentially streamlining operations and enhancing oversight. The company expressed gratitude to the outgoing Supervisory Committee members for their contributions.

China Communications Services Announces EGM to Amend Governance Structure

China Communications Services Corporation Limited has announced an Extraordinary General Meeting (EGM) scheduled for October 23, 2025, in Beijing. The meeting will address significant amendments to the company’s Articles of Association, including the abolishment of the Supervisory Committee and changes to the Rules of Procedure for the General Meeting and the Board. These changes could potentially streamline the company’s governance structure and impact its operational efficiency.