China Railway Construction Co., Ltd. (hereinafter referred to as "China Railway Construction": 601186), one of the largest state-owned construction enterprises, has reached a new high in revenue, a slight decline in net profit, and a new high in per capita salary for employees.
According to the annual report, China Railway Construction achieved revenue of 1,138 billion yuan last year, an increase of 3.8% year-on-year in 2022, and continued to stand above one trillion yuan. The total profit was 38.8 billion yuan, and the net profit attributable to shareholders of the parent company was about 26.1 billion yuan, a decrease of 2.1%.
The main business of China Railway Construction is engineering contracting, which achieved revenue of 987.3 billion yuan last year, an increase of 2.3 percent, and the real estate business achieved a revenue of 83.3 billion yuan, an increase of about 34 percent. Industrial manufacturing, survey, consulting and design also had revenues of 24 billion yuan and 18.8 billion yuan, but all of them declined, while material logistics and other businesses reached 95.9 billion yuan, up by 0.4 percent.
In terms of gross profit margin, the survey, consulting and design business was the highest, exceeding 43% last year, an increase of about 7.4 percentage points, the gross profit margin of real estate and industrial manufacturing also exceeded 10%, and the gross profit margin of the engineering contracting business, which had the highest revenue weight, was about 8.9%, a slight increase. Overall, the consolidated gross profit margin was 10.4%, an increase of 0.31 percentage points over 2022.
Sales expenses (7.4 billion yuan), management expenses (23.5 billion yuan), financial expenses (4.7 billion yuan) and research and development expenses (26.7 billion yuan) all increased last year, and the growth rate was higher than the revenue growth rate, which shows that there is still room for railway construction to control costs. In addition, China Railway Construction has nearly 29,000 yuan of R&D personnel, with a total investment of 26.7 billion yuan in R&D expenses, which is also quite courageous.
The factors that have a greater impact on the net profit of China Railway Construction are: investment income, asset impairment and credit impairment, which were about 4.2 billion yuan, 3.46 billion yuan and 6.48 billion yuan respectively last year. In particular, credit impairment increased losses by 1.7 billion yuan compared to 2022.
In the end, the net profit attributable to shareholders of the parent company last year was about 26.1 billion yuan, a decrease of about 540 million yuan from 2022, which is the second highest level in history.
The controlling shareholder of China Railway Construction is China Railway Construction Group, holding 51.23%, and the actual controller is the State-owned Assets Supervision and Administration Commission of the State Council. CRCC also disclosed executive compensation in its annual report.
According to the data, the highest salary is Chief Economist Sun Gongxin, about 1.226 million yuan, but it is nearly 2.64 million yuan less than in 2022. The salary of the outgoing chairman Wang Jianping was 1.19 million yuan, which was also reduced by 260,000 yuan, and the salary of president Wang Lixin was 1.11 million yuan, a decrease of 550,000 yuan. Zhao Wei, chairman of the board of supervisors, is about 1 million yuan. Chief engineer Lei Shengxiang also reduced by 1.64 million yuan, and there was 1.08 million yuan.
On the whole, the total remuneration of directors, supervisors and senior executives (including those who left office) of China Railway Construction, including independent directors, was about 18.54 million yuan last year, a decrease of 14.24 million yuan or about 43% from the total of 32.78 million yuan in 2022, and the average salary of senior executives decreased from 1.425 million yuan in 2022 to 770,000 yuan.
As of the end of 2023, the total number of employees in China Railway Construction is about 267,000, a decrease of about 2,000 from the end of 2022, with an average income of 4.25 million yuan last year, a profit of 97,500 yuan per capita, and an average salary of 308,000 yuan, which is 10,000 yuan higher than the average salary in 2022.
According to the dividend plan, China Railway Construction plans to pay a dividend of 0.3 yuan per share, with a total dividend of 4.75 billion yuan and a dividend rate of 20%, although it is lower than 30%, it is still the highest dividend ratio since 2010, and its historical dividend rate is only 14%.
The latest market value of China Railway Construction is 116.6 billion yuan, the stock price is 8.59 yuan, the price-earnings ratio is 4.5 times, and the dividend yield is about 3.3%.
(Note: The remuneration mentioned in this article includes wages and bonuses, employee benefits, five insurances and one housing fund, enterprise annuity, supplementary retirement benefits, etc.)