China Communications Construction expects more contracts in H2
China Communications Construction (CCC) expects to gain more orders in the second half of the year as mainland authorities speed up infrastructure projects.
New orders at the Hong Kong and Shanghai-listed company grew only 2.9 per cent to 236 billion yuan (HK$288.65 billion) in the first half, while net profit fell 13.9 per cent to 5.02 billion yuan and revenue dropped 10.2 per cent to 124.74 billion yuan.
The net profit and revenue were below analysts' expectations, a Citi report said.
The state-owned company is China's largest port builder and dredger and the world's largest container crane manufacturer, but it also constructs roads, railways and buildings.
It would have more new orders in the second half than in the first, chairman Zhou Jichang said. He said CCC recently won three of the four tenders for the first phase of a government project to dredge the Yangtze River. The three contracts total 2.6 billion yuan, according to the company's website.
The total value of the dredging project over the next few years was 14 billion yuan, Zhou said.
This month, CCC won three expressway projects: a US$80 million contract in Uganda, a 395 million yuan deal in Hubei and a 549 million yuan deal in Jiangxi.
Although the firm's orders in the first half did not look encouraging, its order flow improved from May, JPMorgan said. "The recent conclusion of the leadership transition at the local governments should mark the turning point, given local governments are starting to roll out infrastructure projects, as indicated by ambitious stimulus plans by Changsha and Guizhou."