China Communications Services (0552) AI Stock Analysis

• Market Cap: $32.34B
• Dividend Yield: 5.04%
• Average Volume (3M): 7.89M
• Price to Earnings (P/E): 8.3
• Beta (1Y): 0.69
• Revenue Growth: -0.99%
• EPS Growth: -1.64%
• Country: HK
• Employees: 75,068
• Sector: Communication Services
• Sector Strength: 80
• Industry: Telecommunications Services
• EPS (TTM): 0.23
• Shares Outstanding: 2,391,420,200
• 10 Day Avg. Volume: 6,342,214
• 30 Day Avg. Volume: 7,892,992
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.43
• Enterprise Value/Revenue: 0.09
• Enterprise Value/Gross Profit: 0.79
• Enterprise Value/Ebitda: 4.04
• 1Y Price Target: $5.02
• Price Target Upside: 6.20% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 77 Outperform
• Price Target: HK$5.00 ▲(5.71% Upside)

The overall stock score of 76.5 reflects a robust financial profile and attractive valuation, offset by potential technical overextension. The company's strong cash flow and financial stability are significant strengths, while the valuation metrics enhance its appeal. However, technical indicators suggest caution due to overbought conditions.

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 makes money through several key revenue streams. The primary source of revenue is its telecommunications infrastructure services, which include network construction, design, and project supervision. This is complemented by its business process outsourcing services, which encompass network maintenance, facilities management, and supply chain services. Additionally, the company generates income from its applications, content, and other services, which involve system integration, software development, and data center services. Significant partnerships with major telecommunications operators and government contracts contribute to its earnings, ensuring a steady flow of business and revenue.

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

China Communications Services Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.73
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0552, the sentiment is Positive. The current price of 4.73 is above the 20-day moving average (MA) of 4.59, above the 50-day MA of 4.43, and above the 200-day MA of 4.22, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 73.10 is Negative, neither overbought nor oversold. The STOCH value of 60.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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	77 Outperform	$32.34B	8.27	8.19%	5.04%	-0.99%	-1.64%
Sector *	61 Neutral	$41.49B	-3.35	-10.67%	4.00%	2.69%	-42.23%
CHWRF	―	$23.89B	10.82	5.62%	0.64%	―	―
CCTTF	―	$1.23B	10.49	8.46%	―	―	―
ZCH	―	€77.16B	11.60	7.35%	―	―	―
HKTTF	―	$12.40B	18.00	14.75%	6.38%	―	―
0008	62 Neutral	HK$41.85B	―	-14.69%	6.90%	4.26%	36.68%

China Communications Services Corporate Events

China Communications Services Announces AGM Results and Director Changes

China Communications Services Corporation Limited announced the successful passing of all proposed resolutions at its 2024 Annual General Meeting. Key resolutions included the approval of the company’s consolidated financial statements, profit distribution, and dividend payment for 2024, as well as the re-appointment of KPMG as auditors. Additionally, several directors were re-elected, ensuring continuity in the company’s leadership. These developments are expected to maintain the company’s strong operational framework and positively impact its market positioning.

The most recent analyst rating on (HK:0552) stock is a Hold with a HK$4.69 price target. To see the full list of analyst forecasts on China Communications Services stock, see the HK:0552 Stock Forecast page.

China Communications Services Announces Board Composition and Roles

China Communications Services Corporation Limited has announced the composition of its board of directors, highlighting the roles and functions of each member. This announcement underscores the company’s commitment to strong governance and strategic oversight, which is crucial for maintaining its competitive position in the telecommunications industry and ensuring effective stakeholder engagement.

The most recent analyst rating on (HK:0552) stock is a Hold with a HK$4.69 price target. To see the full list of analyst forecasts on China Communications Services stock, see the HK:0552 Stock Forecast page.

China Communications Services Announces Final Dividend for 2024

China Communications Services Corporation Limited announced a final dividend of RMB 0.2187 per share for the financial year ending December 31, 2024, with payment to be made in Hong Kong dollars at an exchange rate of RMB 1 to HKD 1.08968. The announcement highlights the company’s commitment to returning value to shareholders, with implications for international stakeholders due to varying withholding tax rates based on tax treaties between the PRC and other countries.

The most recent analyst rating on (HK:0552) stock is a Hold with a HK$4.69 price target. To see the full list of analyst forecasts on China Communications Services stock, see the HK:0552 Stock Forecast page.

China Communications Services Announces Supplemental AGM Notice and Board Election

China Communications Services Corporation Limited has issued a supplemental notice for its Annual General Meeting (AGM) scheduled for May 29, 2025, in Beijing. The notice includes an additional resolution for the election of Mr. Cheng Jianjun as a non-executive director. This appointment is expected to strengthen the company’s board and align with its strategic goals, potentially impacting its governance and stakeholder relations.

China Communications Services Proposes New Non-Executive Director Appointment

China Communications Services Corporation Limited has proposed the appointment of Mr. Cheng Jianjun as a non-executive director, pending shareholder approval at the upcoming annual general meeting on May 29, 2025. Mr. Cheng, with extensive experience in the telecommunications industry, currently holds several vice-presidential roles within China Mobile and has previously served in various high-level positions within China’s Ministry of Industry and Information Technology. His appointment is expected to strengthen the company’s strategic direction and governance, although he will not receive any salary or fees during his term.