CSCEC Achieves a Steady Growth in Financial Performance in 2021 and Proposes to Declare and Pay Cash Dividends Exceeding RMB10 Billion

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June 17st 2022, Beijing - China State Construction Engineering Corporation Limited ("CSCEC", 601668.SH) released the Annual Report 2021 (English Version) on its official website. This is third English regular report released by CSCEC in a row to meet the needs of international investors and partners. CSCEC's 2021 annual performance indicators hit record highs again. The Company achieved a total operating revenue of RMB1.89 trillion and net profit attributable to the parent company of RMB51.41 billion for the year of 2021, a YOY increase of 17.1% and 14.4% respectively. CSCEC ranked 13th in Fortune Global 500 in 2021.


Amount of Newly Signed Orders and Revenue Both Exceeding Trillion Yuan for Five Consecutive Years

CSCEC signed new contracts with a total value of RMB3,529.5 billion for the year of 2021, a YOY increase of 10.3%. The value of newly signed contracts for construction business stood at a record high of RMB3,104.7 billion.

During the reporting period, CSCEC achieved a total operating revenue of RMB1,891.3 billion, a significant YOY increase of 17.1%, 60.6% of which came from housing construction business, down 1.4 percentage point YOY; 21.7% and 17.5% from infrastructure construction and real estate respectively, a YOY increase of 0.1 and 0.7 percentage point, respectively. This reflects the continued transformation and development of the Company.

CSCEC successfully completed the major projects such as the "Great Journey" performance stage, the Central Gifts and Cultural Relics Management Center, and 27 Winter Olympic venues. In active response to China's major national strategies and regional coordinated development strategies, the Company invested RMB384.4 billion in strategic regions such as Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Greater Bay Area. The value of new contracts amounted to RMB3.03 trillion. The Company extensively participated in the construction of the Belt and Road Initiative, and maintained solid overseas performance and normal operation of projects, demonstrating its heritage of overseas operations.

Cash Dividends Exceeding RMB10 Billion for the First Time

CSCEC adheres to a steady cash dividend policy, and strives to increase the amount of dividend per share every year. In 2021, the Company proposed to distribute a record-high of RMB10.5 billion cash dividends in total, i.e. RMB2.50 (tax inclusive) every 10 shares. The growth rate of cash dividends was higher than that of the net profit attributable to the parent company, and the proportion of cash dividends has increased for three consecutive years.

Remarkable Performance in Principal Business

During the reporting period, for the housing construction business, CSCEC won 10 bids for super high-rise projects over 300 meters. The Company achieved a YOY increase of more than 60%, 40% and 25% in the values of newly signed contracts, respectively, for medical and health facilities, industrial plants and educational facilities. For the infrastructure construction business, CSCEC achieved a rapid growth in business scale and continued to optimize and transform the business. The YOY increase in the value of newly signed contracts for railway business exceeded 60%. The Company maintained a stable operation in the real estate business. The real estate inventory is located in first-tier and provincial capital cities. CSCEC currently owns 12.37 million square meters of self-held properties encompassing office buildings, hotels, apartments, commercial real estate and others. These properties record a net book value of RMB122.7 billion, accounting for 5.1% of the Company's total assets. With a low leverage ratio, China Overseas, a subsidiary of CSCEC, promoted the development of commercial properties, education and elderly care and logistics while accelerating the principal business of residential development.

Continuously Investing in Scientific and Technological Innovation

CSCEC invested RMB39.9 billion in scientific research throughout the year, with the investment intensity exceeding 2% for the first time. The Company is doing its utmost to work through the technical bottlenecks and enhance the ability of "Created in China" in the construction field. It applied carbon fiber cable anchor system in thousand-ton grade to the world's first large-scale engineering project, made a breakthrough in the underlying graphics platform technology of BIM software, and released its own software brand. The Company established the first 5G smart construction site in China, accelerated the layout of construction industrialization and promoted green and low-carbon transformation in the construction field. The Company has won 5 State Science and Technology Progress Awards, including 2 first prizes, and 15 Tien-yow Jeme Awards. The number and quality of awards have reached a record high.

Significantly Improved Quality of Operations

CSCEC continued to work hard in the "six special actions" and improved its ability in business management. The Company recorded a YOY increase of 1.1 and 1.9 percentage points in the gross profit margin of the housing construction and the infrastructure construction business respectively. The PPP projects in operation delivered a satisfactory return rate of 91.3%. In particular, 98.3% of the projects passed the annual operation performance assessment. CSCEC improved its ability to control debt risks, and recorded a gearing ratio of 73.2% at the end of the year, a decrease by 0.5 percentage point from the beginning of the year. The Company strengthened cash flow management and took multiple measures to speed up the collection of construction payments and other funds. The Company achieved a net operating cash inflow of RMB14.36 billion. Since its listing, the Company has maintained the weighted return on net assets at a high level of above 15%.

Continuously Improving Future Development

CSCEC will attach more importance to high-quality development, deepen reform and innovation, and further leverage its strategic advantages in scale. The Company will seize market opportunities in serving the national strategy, cultivate new momentum for development in the promotion of "dual carbon" and digital transformation, and strengthen risk prevention and control. The Company will strive to secure new contract valuing more than RMB3.85 trillion and achieve an operating revenue of over RMB2.01 trillion in 2022. CSCEC will adhere to the principle of seeking progress while maintaining stability. The Company will maintain a high level of stable operation in order to bring better return to its shareholders and investors.

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