China Railway Construction Corporation Limited 2009 H Share Annual Results Presentation

Transcription

1 China Railway Construction Corporation Limited 2009 H Share Annual Results Presentation May 2010

2 Agenda Results Overview 2. Business Overview 3. Financial Overview 4. Briefing on A Share Non-Public Offering and Assets to be Acquired 5. Future Prospects & Development Strategies 3

3 Results Overview

4 2009 Strengthening Core Business & Accelerating Transformation of Growth Mode 11 Speedy growth of domestic construction sector supported by the State s efforts to boost domestic consumption 22 Aggressively expanding into overseas markets & maintaining higher growth in overseas operations 33 Adjustment of business composition towards upper stream businesses with higher profit margin We firmly grasped the opportunities brought by the PRC government s increasing infrastructure investment, and strengthened the efforts on expansion of new projects Railway projects: #1 in the sector in terms of new contract value Non-railway projects: the new contract value of non-railway projects as a percentage of that of the construction segment is larger than 2008, which will further diversify the construction revenue in the future Rapid development in the overseas business supported by our strong brand name, experiences in overseas construction markets and the going global policy of the PRC government We undertook a total of 72 overseas projects in 2009 Overseas new contract value grew by 42% YoY Accelerating structural adjustment and upgrade amid rapid expansion of overall business scale Our various non-construction sectors including survey, design & consultancy, equipment manufacturing, logistics and capital operations also achieved rapid growth 5

5 Outstanding Operating and Financial Results New Contract Value, Revenue and Net Profit Reached Record High New Contract Value Backlog YoY Growth: 42.1% 601,327 YoY Growth: 49.8% 705, , ,089 Revenue Net Profit Attributable to Shareholders YoY Growth: 57.2% YoY Growth: 81.1% 344,976 6, ,410 3,644 6

6 Increasing Global Influence and Brand Awareness CRCC Won Various Awards in 2009 #9 in Top 100 Listed Companies in 2009 #14 in Top 500 PRC Enterprises 10 Most Competitive HK Listed Companies in 2009 in China Best BoD of Market Cap Management in China 2009 Rising Industry Status Complemented by Increasing Global Influence and Brand Awareness Ranking rose to the 252 th in the Fortune 500 in 2009 Ranked the 4 th largest contractor in the world out of a league of 225 for the year 2009 by the ENR Magazine #252 #4 #4 #356 #384 #6 #485 #

7 2. Business Overview

8 Strong Growth in Construction Operations New Contract Value Hit Record High Revenue Growth Remains Strong 399,023 YoY Growth: 39.2% 555,314 YoY Growth: 56.7% 314,937 Industry-leading Backlog Secures Baseline Revenue 200,973 YoY Growth: 49.1% 684, ,091 9

9 Strong Growth in Construction Operations Leading Railway Business New Contract Value Grew Rapidly Landmark Projects 254,100 YoY Growth: 20.1% 305,062 CRCC undertook 46% of the construction of the Beijing-Shanghai High-speed railway Beijing-Shanghai High-speed Railway Industry Leading New Contract Value 2% 7% 8% 39% Breakdown of the Value of New Contracts Tendered by the Ministry of Railway (2009) 45% Source: The National Railway Engineering Business Center. CRCC Company 1 Company 2 Company 3 Other companies Wuhan-Guangzhou Passenger Line Harbin-Qiqihar Passenger Line The fastest and longest high-speed railway constructed in one stage globally, running at 350km/h Undertook the construction of all the five bid sections with a total contract value of RMB 18.9bn 10

10 Strong Growth in Construction Operations Non-Railway Business Scored Strong Operating Results with New Contract Value Growing Significantly The Value of New Roadway Contracts Doubled 61,634 YoY Growth: 107.6% 127,955 Landmark Projects The Value of New Contracts for Urban Rail Transit Projects Grew by Nearly 3 Times 15,009 YoY Growth: 247.9% 52,216 Beijing Subway Line 6 Percentage of New Contract Value of Non- Railway Projects Picking up Xi an Subway Line % 45.1% 63.7% 54.9% Hangzhou-Ruili Expressway Railway Non-Railway 11

11 Leading Survey, Design & Consultancy Operations New Contract Value Grew Steadily 4,609 YoY Growth: 35.1% 6,225 Landmark Projects Awards 5 Awards Qiantang River Underwater Tunnel National Survey & Design 4A Awards Revenue Increased Sharply YoY Growth: 61.2% 7,337 Wuhan-Guangzhou Passenger Line 20 Awards 4,551 Provincial Survey & Design 4A Awards Wuhan Yangtze River Tunnel 12

12 Ongoing Innovation in Equipment Manufacturing Operations New Contract Value Grew Significantly New Product Launch via Technical Innovation YoY Growth: 60.7% 5,680 3,534 Pneumatic Girder Gantry Crane (900t) High Speed Turnout (350 km) Revenue Grew Significantly YoY Growth: 68.1% 8,036 Girder Conveying Machine High-speed Spring Bar Fastener 4,781 Girder Erecting Machine High-speed Rail Welding Machine 13

13 Rapid Growth in Logistics Business Landmark Logistics Bases # 9 Top 50 Logistics Enterprises in China Northeast Warehouse & Logistics Base New Contract Value Heavy Rail Reserve Base Revenue Refined Oil Depot for Railway Construction YoY Growth:93.5% 27,946 YoY Growth: 62.8% 15,869 14,440 9,747 14

14 Breakthrough in Capital Operations Landmark BT Projects Landmark BOT/BOO Projects Mining Projects Acquisition of Tonghe Mining in Inner Mongolia Kunming 2 nd Ring BT Project Chongqing Yudong Yangtze River Bridge Project Beijing-Shanghai Expressway Leling-Jinan Section (113 km) Chengyu Expressway Chongqing Section (251 km) Acquired 100% of Tonghe Mining ( 通和矿业 ) which is located at Linxi County, Chifeng City, Inner Mongolia and has abundant copper resources Acquisition of a copper mine in Ecuador Currently working with Tongling Nonferrous Metals Group on the acquisition of the Canadian-based Corriente Resources Inc. 15

15 3. Financial Overview

16 Continued Significant Growth in Revenue and Profit Revenue Gross Profit 171,997 3-Year CAGR: 41.6% 219, ,976 11,399 3-Year CAGR: 40.6% 15,803 22, Operating Profit Net Profit 3-Year CAGR: 40.6% 8,631 3-Year CAGR: 70.9% 6,732 4,369 4,524 2,306 3,

17 Increased Shareholder Return Net Profit Attributable to Shareholders Basic Earnings per Share Dividend per Share (RMB) (RMB) 3-Year CAGR: 69.3% 6,599 3-Year CAGR: 36.4% YoY Growth: 60.0% ,301 3,

18 Further Strengthened Capital Structure Total Assets Total Equity 3-Year CAGR: 34.3% 282,990 3-Year CAGR: 220.2% 48,301 54, , ,878 5, Cash and Cash Equivalent* Net Current Assets 3-Year CAGR: 54.3% 55,006 62,370 28,438 31,424 26, *Incl. pledged deposits ,565 19

19 Analysis on Cash Flow Statement Cash Flow from Operating Activities Cash Flow from Investing Activities 17, ,421-12,183-13,068-13,629 7,300 Cash Flow from Financing Activities 32,287 7,631 1,

20 Key Indicators in Financial Statement Income Statement growth % of total revenue Revenue 171, , , % 100% Sales costs (160,598) (203,607) (322,428) 58.4% 93.5% Gross profit 11,399 15,803 22, % 6.5% Sales and marketing expenses (696) (849) (1,016) 19.7% 0.3% Administrative expenses (6,736) (9,384) (13,897) 48.1% 4.0% Operating profit 4,369 4,524 8, % 2.5% Financial revenue 652 1, (32.5%) 0.3% Financial expenses (1,272) (1,270) (1,220) (3.9%) 0.4% Pre-tax profit 3,788 4,569 8, % 2.4% Net profit 2,306 3,706 6, % 2.0% Net profit attributable to shareholders 2,301 3,644 6, % 1.9% 21

21 Key Indicators in Financial Statement (Cont d) Balance Sheet and Cash Flow Statement growth Total assets 156, , , % Cash and cash equivalents (incl pledged deposits) 26,190 55,006 62, % Total liabilities 151, , , % Total interest-bearing liabilities 25,963 22,131 26, % Owner s equity 5,274 48,301 54, % Equity distributable to shareholders 5,058 47,774 53, % Cash flow statement Net cash from operating activities 9,421 7,300 17, % Net cash from investing activities (12,183) (13,068) (13,629) 4.3% Net cash from financing activities 7,631 32,287 1, % Net increase in cash and cash equivalents 4,869 26,518 5, % 22

22 4. Briefing on A Share Non-Public Offering and Assets to be Acquired

23 A-Share Non-Public Offering Summary Share Class Offering Mode Offering Targets Subscription Consideration Number of Shares to be Issued A-shares Private offering to specific target investors No more than 10 investors, including China Railway Construction Corporation ( CRCCG ) and other investors who comply with the relevant regulations and conditions CRCCG: cash and assets Other investors: cash No more than billion shares, of which CRCCG will subscribe for no more than 518 million shares Offering Price No less than 90% of the average trading price of the Company s A share for the 20 consecutive trading days prior to the benchmark pricing day, i.e. RMB 7.74 per share Use of Proceeds Total proceeds are expected to be no more than RMB 8 billion, of which the portion CRCCG will subscribe for will be no more than RMB 4 billion The cash portion of the offering proceeds will be used mainly for the BOT project of the Beijing-Shanghai Expressway (Leling-Jinan Section), the BOT project of the Chengdu- Chongqing Expressway (Chongqing Section), the BT project of road network upgrade of Taiciqiao of Guiyang, the BT project of the North 2 nd Ring Road of Guiyang, and the rest for the repayment of bank loans and the replenishment of working capital 24

24 Overview of the Assets to be Acquired Chongqing-Suining Expressway Xianyang Luqiao Xi an Tianchuang Chongqing-Suining Expressway Wei River Bridge No. 3 CRCC Luoke Tower Chongqing-Suining Expressway connects Chongqing and Suining, Sichuan with a total length of 148km, of which the Chongqing section of the Chongqing Tiefa Suiyu Expressway is 112km long An essential part of Chongqing-Mianyang branch line of the national Ningbo-Zhangmu expressway, and is also an important part of the 3 Ring Roads, 10 Divergent Roads and 3 Connecting Roads road network in Chongqing. It is the shortest expressway connecting Chongqing and Chengdu CRCCG holds 80% stake while Chongqing Expressway Group holds the remaining 20% stake The 1.9 km long Wei River Bridge No. 3 is located in the west of Xianyang City Jointly owned by CRCCG (90%) and Xianyang City Construction Investment Co., Ltd (10%). Its major assets is Wei River Bridge No. 3 The bridge was put into operation in Jan The term of operation lasts for 25 years Situated in the prime location of Xi an The project was delivered for inspection at the end of 2009 CRCCG holds 100% stake The entire expressway was put into operation at the end of 2007 and will be operating for 30 years 21 25

25 5. Future Prospects and Development Strategies

26 Future Prospects 2010 Outlook China economy faces the pressure of prevention against inflation, maintaining growth and structural adjustment while the government policies tend to be relatively tight China shall continue with the infrastructure development particularly in the comparatively weak areas such as railway and urban rail transit systems Property market is expected to return to a healthier and more rational direction amid government intervention, and the housing needs of people of medium and low income will be supported (10,000 km) China s Target for Total Railway Mileage E Source: Statistics and planning by the Ministry of Railways (2010). Medium & Long Term Prospects Globalization will continue and the economic strength of the emerging countries is expected to further improve, resulting in long term demand for infrastructure construction With increasing urbanization, the Chinese economy is gradually becoming consumption-directed, which will result in continued long term growth in the demand for infrastructure, real estate and mineral resources China s Target for Total Mileage of Urban Rail Transit (km) Source: The Ministry of Construction, chinanews. 2,700 6, E 2020E 27

27 Development Strategies Continue to enhance the strength of our construction operations, implement structural adjustment and expand further into overseas markets + Speed up the transformation of the growth model, accelerate the business adjustment towards the upper stream businesses with higher profit margin Construction Survey, Design and Consultancy Equipment Manufacturing Real Estate Logistics Capital Operation 28