China Railway Construction (1186) AI Stock Analysis

• Market Cap: HK$108.30B
• Dividend Yield: 5.92%
• Average Volume (3M): 5.78M
• Price to Earnings (P/E): 3.1
• Beta (1Y): 0.81
• Revenue Growth: -5.10%
• EPS Growth: 0.34%
• Country: HK
• Employees: 264,045
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 0.29
• Shares Outstanding: 2,076,296,000
• 10 Day Avg. Volume: 6,962,929
• 30 Day Avg. Volume: 5,777,466
• PEG Ratio: -0.21
• Price to Book (P/B): 0.22
• Price to Sales (P/S): 0.07
• P/FCF Ratio: -1.05
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 57 Neutral
• Price Target: HK$5.50

The score is held back mainly by weaker financial quality—negative operating/free cash flow and materially higher leverage—despite resilient revenue scale. Valuation is a major offset with a very low P/E and high dividend yield, while technicals appear broadly neutral with no strong trend signal.

Positive Factors

Revenue scale & stability

A very large, stable revenue base across major infrastructure segments supports a steady backlog and predictable contract flow. This scale underpins bargaining power with suppliers and clients and provides durable revenue visibility over the next several quarters.

Government-backed contract access

Close ties to government entities materially improve access to large, long‑dated infrastructure projects and state financing. That structural link reduces demand volatility and supports long-term project pipelines and funding availability versus purely private peers.

Integrated service offering

An integrated business model—covering design, construction, consulting, project management and property development—enables cross-selling, higher value capture on projects and diversified revenue streams, which supports margin resilience and reduces single‑segment cyclicality.

Negative Factors

Negative operating & free cash flow

Recurrent negative operating and free cash flow indicates cash conversion problems from projects and working capital strain. Over months this forces reliance on borrowing or asset sales, weakens liquidity cushions and limits reinvestment or dividend flexibility.

Materially higher leverage

A sharp increase in leverage reduces financial flexibility and raises refinancing and interest‑rate risk. High net debt relative to equity constrains bidding capacity for new projects, amplifies downside if margins compress, and elevates solvency sensitivity to cash‑flow volatility.

Thin profitability margins

Relatively thin gross and net margins leave little room to absorb input cost inflation, project delays or pricing pressure. Structurally narrow margins increase earnings volatility from modest cost or revenue swings and constrain the firm's ability to rebuild cash buffers.

China Railway Construction Business Overview & Revenue Model

Company Description

China Railway Construction Corporation Limited, together with its subsidiaries, operates as an integrated construction company in Mainland China and internationally. It operates through five segments: Construction Operations; Survey, Design and Consultancy Operations; Manufacturing Operations; Real Estate Development Operations; and Other Business Operations. The Construction Operations segment engages in the construction of infrastructure, such as railways, highways, metropolitan railways, and real estate projects; and bridges, tunnels, airports, and wharfs, as well as housing, municipal engineering, water conservancy, and hydropower. The Survey, Design and Consultancy Operations segment provides survey, design, and consultancy services for civil engineering and infrastructure construction, such as railways, highways, and urban rail transport, etc. The Manufacturing Operations segment is involved in the research and development, production, and sale of mechanical equipment comprising railway track maintenance and tunnel boring machinery, as well as manufactures track system, etc. The Real Estate Development Operations segment engages in the development, construction, and sale of residential and commercial properties. The Other Business Operations segment includes trade and logistics, finance and insurance brokerage, and highway operations. The company was incorporated in 2007 and is headquartered in Beijing, the People's Republic of China. China Railway Construction Corporation Limited is a subsidiary of China Railway Construction Corporation.

How the Company Makes Money

CRCC generates revenue primarily through its construction contracts, which encompass a variety of infrastructure projects, including railways, highways, and urban transit systems, both domestically and internationally. The company earns money by bidding on and winning contracts from government agencies and private entities for construction services. Key revenue streams include income from construction projects, design and consultancy fees, and investments in infrastructure projects. Additionally, CRCC benefits from joint ventures and partnerships with other firms, both in China and overseas, which enhance its capabilities and market reach. The company's strong relationship with the Chinese government also plays a crucial role in securing funding and contracts for major infrastructure initiatives. Furthermore, CRCC has diversified its revenue through real estate development, providing additional streams of income through property sales and leasing.

China Railway Construction Financial Statement Overview

Summary

Large, stable revenue base and steady (but thin) margins are positives, but financial quality is pressured by sharply higher leverage (debt-to-equity ~2.84 TTM) and a return to negative operating and free cash flow in 2024 and TTM, increasing reliance on balance-sheet funding.

Income Statement

Revenue scale remains very large and relatively stable, with TTM (Trailing-Twelve-Months) revenue roughly flat versus 2024 after a small decline in 2024 and modest growth in 2023–2022. Profitability is steady but thin for the sector profile: gross margin is ~9.8–10.3% and net margin ~2.1–2.4% across periods, leaving limited buffer if project pricing or costs move against the company. TTM (Trailing-Twelve-Months) net income is slightly higher than 2024, but still below the 2022–2023 level, indicating earnings momentum is mixed.

Balance Sheet

Leverage has increased sharply: debt-to-equity rose from ~0.86–1.29 (2020–2024) to ~2.84 in TTM (Trailing-Twelve-Months), which materially reduces financial flexibility. Return on equity is positive but trending lower versus the 2021–2022 period (TTM ~7.1% vs ~9.2% in 2021–2022), suggesting weaker efficiency or higher capital intensity. While the asset base continues to expand, the higher debt load is a clear balance-sheet risk factor.

Cash Flow

Cash generation is the main weak spot: operating cash flow has turned negative again in 2024 and TTM (Trailing-Twelve-Months) (TTM about -79B), and free cash flow is also negative in both periods (TTM about -65B). This marks a deterioration from 2022 (positive operating and free cash flow) and suggests working-capital or project cash timing pressure. With cash flow not consistently covering reported earnings (negative operating cash flow relative to net income in 2024 and TTM), funding needs are more likely to be met through incremental borrowing or balance-sheet usage.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.04T	1.07T	1.14T	1.10T	1.02T	910.32B
Gross Profit	104.03B	109.57B	116.79B	110.57B	97.88B	84.34B
EBITDA	40.44B	65.74B	67.59B	64.21B	59.25B	54.46B
Net Income	22.51B	22.22B	26.10B	26.68B	24.69B	22.39B
Balance Sheet
Total Assets	2.07T	1.86T	1.66T	1.52T	1.35T	1.24T
Cash, Cash Equivalents and Short-Term Investments	174.32B	187.24B	168.59B	159.39B	127.28B	188.58B
Total Debt	774.46B	424.38B	282.57B	260.86B	232.23B	218.26B
Total Liabilities	1.70T	1.44T	1.25T	1.14T	1.01T	929.15B
Stockholders Equity	272.84B	328.25B	309.84B	290.48B	268.79B	254.30B
Cash Flow
Free Cash Flow	-64.33B	-69.37B	-14.51B	25.87B	-40.18B	8.72B
Operating Cash Flow	-79.21B	-31.42B	20.41B	56.13B	-7.30B	40.11B
Investing Cash Flow	-54.95B	-48.04B	-55.91B	-55.65B	-61.07B	-50.30B
Financing Cash Flow	88.70B	94.76B	44.59B	33.89B	10.60B	38.24B

China Railway Construction Technical Analysis

• Last Price: ―

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1186, the sentiment is undefined. The current price of undefined is equal to the 20-day moving average (MA) of ―, equal to the 50-day MA of ―, and equal to the 200-day MA of ―, indicating a neutral trend. The MACD of ― indicates undefined momentum. The RSI at ― is undefined, neither overbought nor oversold. The STOCH value of ― is undefined, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a undefined sentiment for HK:1186.

China Railway Construction Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2386	70 Outperform	HK$30.32B	11.11	8.27%	5.31%	11.89%	8.49%
3311	67 Neutral	HK$46.64B	4.74	13.70%	6.69%	-5.14%	-4.05%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
3996	60 Neutral	HK$71.23B	5.59	7.78%	3.90%	11.49%	-7.01%
1186	57 Neutral	HK$108.30B	3.05	8.32%	5.92%	-5.10%	0.34%
1618	44 Neutral	HK$66.80B	9.05	3.80%	3.21%	-18.36%	-47.29%
2068	44 Neutral	HK$17.65B	81.37	3.35%	―	-1.75%	―

China Railway Construction Corporate Events

China Railway Construction Secures Major Railway Projects

China Railway Construction Corporation Limited has secured significant contracts for two major railway projects in China. The company, through its consortiums, will undertake pre-construction work on the Hefei–Chizhou Railway and the Wenzhou-Fuzhou High-speed Railway, with project values exceeding RMB 1.5 billion each. These projects are expected to enhance the company’s operational capacity and strengthen its position in the infrastructure sector.

The most recent analyst rating on (HK:1186) stock is a Hold with a HK$6.00 price target. To see the full list of analyst forecasts on China Railway Construction stock, see the HK:1186 Stock Forecast page.

China Railway Construction Acquires Minority Equity Interests in Subsidiaries for RMB11 Billion

China Railway Construction announced a significant acquisition involving the purchase of minority equity interests in several subsidiaries from eight investors, including Taiping Life and BOC Asset, for a total of RMB11 billion. This transaction will result in the target companies becoming wholly-owned subsidiaries of China Railway Construction, enhancing its control over these entities and potentially strengthening its market position. The acquisition is classified as a discloseable and connected transaction under Hong Kong Listing Rules, requiring reporting and announcement but exempt from shareholder approval.

The most recent analyst rating on (HK:1186) stock is a Buy with a HK$6.00 price target. To see the full list of analyst forecasts on China Railway Construction stock, see the HK:1186 Stock Forecast page.

China Railway Construction Reports Strong Q3 2025 Financial Results

China Railway Construction has released its unaudited financial results for the third quarter of 2025, reporting a revenue of RMB728.4 billion and a net profit attributable to shareholders of RMB14.8 billion. This financial performance reflects the company’s robust operations and solid market positioning, indicating continued growth and stability in its core infrastructure development activities.

The most recent analyst rating on (HK:1186) stock is a Buy with a HK$6.00 price target. To see the full list of analyst forecasts on China Railway Construction stock, see the HK:1186 Stock Forecast page.

China Railway Construction Signs New Leasing Agreement with CRCCG

China Railway Construction has announced the signing of a New Property Leasing Framework Agreement with its controlling shareholder, CRCCG, effective from January 1, 2026, to December 31, 2026. This agreement, which involves an estimated expenditure cap of RMB200 million, aims to regulate ongoing connected transactions, ensuring compliance with Hong Kong Listing Rules. The transactions are subject to reporting and annual review requirements but are exempt from independent shareholders’ approval, reflecting a strategic move to maintain operational continuity and regulatory adherence.

The most recent analyst rating on (HK:1186) stock is a Buy with a HK$6.00 price target. To see the full list of analyst forecasts on China Railway Construction stock, see the HK:1186 Stock Forecast page.

China Railway Construction Reports Q3 2025 Operating Results

China Railway Construction Corporation Limited announced its major operating information for the third quarter of 2025, highlighting a 3.08% increase in the total value of newly signed contracts compared to the same period last year. Notable growth was seen in environmental protection and emerging industries, while real estate development operations experienced a decline in sales contract value by 11.53%.

China Railway Construction to Release Q3 2025 Results and Host Investor Presentation

China Railway Construction Corporation Limited announced that it will release its third quarterly report for 2025 on October 31, 2025. To provide investors with a comprehensive understanding of its financial and operational performance, the company will hold an online presentation on November 3, 2025. This initiative aims to enhance transparency and engage with stakeholders by addressing common investor concerns and discussing key financial indicators.