Hebei Construction Group Co. Ltd. Class H (1727) AI Stock Analysis

• Market Cap: HK$660.52M
• Dividend Yield: N/A
• Average Volume (3M): 155.91K
• Price to Earnings (P/E): 4.1
• Beta (1Y): 1.00
• Revenue Growth: -25.78%
• EPS Growth: -18.64%
• Country: HK
• Employees: 6,940
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 0.06
• Shares Outstanding: 461,383,480
• 10 Day Avg. Volume: 292,750
• 30 Day Avg. Volume: 155,908
• PEG Ratio: -15.79
• Price to Book (P/B): 0.18
• Price to Sales (P/S): 0.04
• P/FCF Ratio: -0.72
• 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: 60 Neutral
• Price Target: HK$0.39 ▲(3.68% Upside)

The overall stock score of 60 reflects significant financial performance challenges, including declining revenue and profitability, increased leverage, and negative cash flow. Technical analysis indicates bearish momentum, with the stock being oversold. However, the low P/E ratio suggests potential undervaluation, which could be attractive to value investors.

Positive Factors

Stable public‑sector contract pipeline

A material share of revenue from public‑sector infrastructure contracts and government partnerships supports a steadier multi‑month project pipeline. This structural demand reduces exposure to short consumer cycles and helps sustain bidding opportunities and backlog visibility.

Diversified service and sector exposure

Breadth across civil, building, rail and project management provides resilience versus single‑market downturns. Diversified services enable cross‑selling, capture of integrated project scopes, and reduce dependence on any one end market over the medium term.

Established scale and execution capacity

A sizeable workforce and established operational scale support the company’s ability to execute large, complex infrastructure projects and maintain ongoing contracts. Scale underpins bidding competitiveness, resource allocation and delivery capabilities over coming months.

Negative Factors

Sharp revenue decline

A roughly 25% revenue drop signals shrinking project wins or execution/collection issues. Persistent top‑line contraction undermines economies of scale, weakens bargaining power with subcontractors, and constrains reinvestment and backlog replenishment over the medium term.

Negative operating and free cash flow

Negative operating and free cash flow indicate strained liquidity and reliance on external financing to fund working capital and project execution. Over months this can limit ability to bid competitively, meet milestone cash needs, and increase refinancing or covenant risk.

Low margins and weak returns on equity

Very low gross and net margins and sub‑3% ROE reflect limited pricing power and capital inefficiency. Persistently thin profitability will reduce retained earnings, slow equity rebuilding and constrain investment capacity, impairing long‑term competitiveness.

Hebei Construction Group Co. Ltd. Class H Business Overview & Revenue Model

Company Description

Hebei Construction Group Corporation Limited engages in the construction contracting of buildings and infrastructure projects in the People's Republic of China. The company operates through two segments, Construction Contracting and Others. It provides construction contracting services for residential, public works, industrial, and commercial construction projects; and municipal and transportation infrastructure, including facilities for wedged and reclaimed water treatment, gas and heating, urban pipelines, landscaping, roads, bridges, and airport runways, as well as specialized and other construction works, including electrical and mechanical installation, and steel structure. The company was founded in 1952 and is headquartered in Baoding, the People's Republic of China. Hebei Construction Group Corporation Limited is a subsidiary of Zhongru Investment Co., Ltd.

How the Company Makes Money

Hebei Construction Group generates revenue primarily through its construction contracts, which include public sector projects and private sector developments. The company earns money by bidding on and securing contracts for various construction projects, where it receives payments based on milestones achieved during project execution. Key revenue streams include civil engineering works, building construction, infrastructure development, and project management services. Additionally, Hebei Construction Group may benefit from strategic partnerships with government entities and private developers, enhancing its ability to secure lucrative contracts. Factors contributing to its earnings include the scale of projects undertaken, efficiency in project execution, and the overall demand for construction services within the regions it operates.

Hebei Construction Group Co. Ltd. Class H Financial Statement Overview

Summary

Hebei Construction Group Co. Ltd. Class H faces challenges with declining revenue and profitability margins, alongside increased leverage and low equity financing. Cash flow generation is a concern, with negative free cash flow indicating potential liquidity issues. Despite these challenges, the company maintains a modest level of gross profitability and equity position, suggesting opportunities for operational and financial improvements.

Income Statement

The company's revenue has experienced a decline from 2022 to 2024, with a negative revenue growth rate of -25.16% in 2024. The gross profit margin for 2024 stands at 5.48%, indicating a modest level of profitability. Net profit margin slightly decreased to 0.68% in 2024, showing a low level of bottom-line profitability. EBIT and EBITDA margins are also low, at 0.81% and 2.67% respectively, reflecting operational challenges.

Balance Sheet

The company's debt-to-equity ratio increased to 0.98 in 2024, indicating a higher leverage position. Return on equity (ROE) is relatively low at 2.74%, which may suggest inefficiencies in generating returns on equity capital. The equity ratio is 10.07%, indicating a small portion of assets are financed by equity. Overall, the balance sheet shows a moderately leveraged position with room for improvement in equity financing.

Cash Flow

The company has faced challenges in generating cash flow, with both operating and free cash flows being negative in 2024. The free cash flow to net income ratio is not calculable due to negative free cash flow, and the operating cash flow to net income ratio is also not available. These factors highlight potential liquidity issues and insufficient cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	21.95B	25.06B	33.49B	40.01B	47.83B	40.15B
Gross Profit	1.23B	1.37B	1.80B	1.63B	2.49B	2.14B
EBITDA	637.25M	668.88M	652.58M	819.82M	-93.16M	1.27B
Net Income	148.43M	170.71M	171.40M	326.73M	-345.98M	759.86M
Balance Sheet
Total Assets	58.38B	61.84B	64.89B	67.63B	66.95B	62.79B
Cash, Cash Equivalents and Short-Term Investments	4.32B	5.77B	7.70B	9.13B	8.81B	8.45B
Total Debt	5.94B	6.07B	5.33B	5.11B	4.00B	4.25B
Total Liabilities	51.91B	55.45B	58.66B	61.46B	61.07B	56.35B
Stockholders Equity	6.31B	6.22B	6.05B	5.99B	5.69B	6.25B
Cash Flow
Free Cash Flow	-570.22M	-1.55B	-1.38B	-46.07M	600.75M	1.60B
Operating Cash Flow	-557.70M	-1.53B	-1.33B	35.16M	854.87M	1.97B
Investing Cash Flow	50.15M	75.21M	-25.14M	-512.00K	-165.09M	-214.35M
Financing Cash Flow	-435.02M	-75.56M	-601.82M	140.23M	-360.97M	-434.60M

Hebei Construction Group Co. Ltd. Class H Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 0.38
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1727, the sentiment is Neutral. The current price of 0.38 is above the 20-day moving average (MA) of 0.37, below the 50-day MA of 0.39, and below the 200-day MA of 0.45, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 55.60 is Neutral, neither overbought nor oversold. The STOCH value of 64.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:1727.

Hebei Construction Group Co. Ltd. Class H Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1627	70 Outperform	HK$920.00M	3.89	14.15%	9.09%	26.57%	-2.39%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1727	60 Neutral	HK$660.52M	4.13	2.36%	―	-25.78%	-18.64%
0687	60 Neutral	HK$1.09B	17.02	5.28%	13.24%	11.24%	64.66%
1780	48 Neutral	HK$378.20M	-40.40	-5.65%	5.26%	-55.42%	-281.93%
1707	47 Neutral	HK$70.56M	-4.57	-9.58%	―	3.97%	14.02%
0711	45 Neutral	HK$792.24M	15.52	2.28%	1.93%	0.97%	―