China's top port builder's H2 profit up 55 pct
China Communications Construction Co Ltd , the country's top infrastructure builder, aims to boost its profit margins in 2008 by beefing up higher yield contracts and investment projects, and through cost controls.
The firm, which is involved in infrastructure construction and design, dredging and port machinery business, reported a forecast-beating 55 percent rise in second-half earnings.
But its stock fell nearly 6 percent to close at HK$17.42 on Wednesday as investors cashed in profits after the shares rose 16 percent in the three weeks to Tuesday.
The company's gross profit margin improved slightly to 10.34 percent last year from 10.29 percent in 2006, Chairman Zhou Jichang said at a news conference.
Its management told analysts in a briefing that it targeted another 0.8 of a percentage point improvement in its gross margin this year.
"The group will continue to increase its investment in dredging and port machinery businesses and will be dedicated to fostering the developing new investment business in order to achieve a more optimal asset structure," Zhou said.
Dredging and port machinery recorded gross profit margins of 17.7 percent and 14.1 percent in 2007, against 7.2 percent from its infrastructure construction business.
China Communications reported a net profit of 3.29 billion yuan ($467 million) for the six months ended December, beating analyst forecasts of 2.76 billion yuan, according to Reuters Estimates. Zhou said Beijing's marco economic controls did not affect the country's overall infrastructure investment in the 11th five year economic plan ending 2010, but it had been more cautious in approving new road projects as they involved land usage. China planned to invest a total of 1.25 trillion yuan in the five years to upgrade and expand its railway system. "China will expedite its investment in railroads this year to 300 billion yuan from about 100 billion in 2006," said Meng Fengchao, president of China Communications. It completed investment of more than 100 billion yuan last year, falling short of its original plan of 250 billion yuan.
Meng believed Beijing would increase investment in railways for the rest of its 11th five-year plan.
To tap the growth, the company has diversified from highway construction to higher-margin infrastructure projects, including high-speed railways, challenging rivals China Railway Group and China Railway Construction .
A possible merger between its wholly owned Shanghai Port Machinery and 43 percent-owned unit, Zhenhua Port Machinery , through a share swap deal, could also expand the profit margin of its the port-machinery division in 2009, analysts said.
The firm, which is involved in infrastructure construction and design, dredging and port machinery business, reported a forecast-beating 55 percent rise in second-half earnings.
But its stock fell nearly 6 percent to close at HK$17.42 on Wednesday as investors cashed in profits after the shares rose 16 percent in the three weeks to Tuesday.
The company's gross profit margin improved slightly to 10.34 percent last year from 10.29 percent in 2006, Chairman Zhou Jichang said at a news conference.
Its management told analysts in a briefing that it targeted another 0.8 of a percentage point improvement in its gross margin this year.
"The group will continue to increase its investment in dredging and port machinery businesses and will be dedicated to fostering the developing new investment business in order to achieve a more optimal asset structure," Zhou said.
Dredging and port machinery recorded gross profit margins of 17.7 percent and 14.1 percent in 2007, against 7.2 percent from its infrastructure construction business.
China Communications reported a net profit of 3.29 billion yuan ($467 million) for the six months ended December, beating analyst forecasts of 2.76 billion yuan, according to Reuters Estimates. Zhou said Beijing's marco economic controls did not affect the country's overall infrastructure investment in the 11th five year economic plan ending 2010, but it had been more cautious in approving new road projects as they involved land usage. China planned to invest a total of 1.25 trillion yuan in the five years to upgrade and expand its railway system. "China will expedite its investment in railroads this year to 300 billion yuan from about 100 billion in 2006," said Meng Fengchao, president of China Communications. It completed investment of more than 100 billion yuan last year, falling short of its original plan of 250 billion yuan.
Meng believed Beijing would increase investment in railways for the rest of its 11th five-year plan.
To tap the growth, the company has diversified from highway construction to higher-margin infrastructure projects, including high-speed railways, challenging rivals China Railway Group and China Railway Construction .
A possible merger between its wholly owned Shanghai Port Machinery and 43 percent-owned unit, Zhenhua Port Machinery , through a share swap deal, could also expand the profit margin of its the port-machinery division in 2009, analysts said.