Breaking Down Zhejiang Construction Investment Group Co.,Ltd Financial Health: Key Insights for Investors

Zhejiang Construction Investment Group Co., Ltd. presents a mixed financial picture that demands a closer look: Q1 2025 revenue was CNY 20.18 billion (up 5.33% YoY) with TTM revenue of CNY 79.61 billion (Q1 quarterly growth 5.30% YoY) versus full-year 2024 revenue of CNY 80.64 billion (down 12.92%); Q1 net income was CNY 226.52 million (vs CNY 202.94 million a year ago) and Q1 EPS rose 11.56% to CNY 0.2094 while TTM net income was CNY 193.6 million and TTM EPS is CNY 0.12, producing a P/E of 76.04, P/S of 0.13 and market cap near CNY 9.33 billion; profitability metrics show ROE at 3.85%, net profit margin 0.25% and operating margin 0.22%, against a capital structure with total debt of CNY 19.91 billion, debt-to-equity 1.89, current ratio 0.93, quick ratio 0.84, equity CNY 10.52 billion and book value per share CNY 6.27 (net cash per share -CNY 9.51, interest coverage 0.31); liquidity and solvency reveal cash and equivalents of CNY 9.62 billion, negative working capital of -CNY 6.96 billion, Altman Z-Score 0.72 and Piotroski F-Score 6, with operating cash flow CNY 2.70 billion, free cash flow CNY 1.84 billion and enterprise value CNY 21.22 billion (EV/EBITDA 37.49); valuation also shows P/B 0.94, dividend per share CNY 0.05 (yield 0.54%) and key growth levers in diversified streams-housing, municipal, engineering, industrial manufacturing and infrastructure (notably toll roads) that provide long-term revenue stability-so read on for a chapter-by-chapter, data-driven breakdown of what these metrics mean for investors

Zhejiang Construction Investment Group Co.,Ltd (002761.SZ) - Revenue Analysis

• Diversified revenue mix: housing construction, municipal projects, engineering design, industrial manufacturing, engineering services, infrastructure investments.
• Infrastructure involvement (notably toll roads) provides long-term, stable cash flow and helps offset cyclicality in construction.
• Recent quarterly growth suggests stabilization after the 2024 revenue decline.

• Low P/S (0.13) indicates the market values the company conservatively relative to sales; investors should assess profitability and cash flow conversion from revenue.
• Stable toll-road and infrastructure returns can smooth revenue volatility from construction cyclicality; monitor concession timelines and traffic trends.
• Watch quarterly bookings, contract backlog, and margin trends within each revenue segment to evaluate quality of revenue growth.

Zhejiang Construction Investment Group Co.,Ltd (002761.SZ) - Profitability Metrics

Key profitability figures provide a snapshot of how efficiently Zhejiang Construction Investment Group converts revenue into earnings and shareholder value in a capital-intensive engineering environment.

• Q1 2025 net income: CNY 226.52 million (vs. CNY 202.94 million in Q1 2024).
• TTM net income (as of Mar 2025): CNY 193.6 million - declined year-over-year.
• Q1 2025 EPS: CNY 0.2094, up 11.56% YoY.
• Return on Equity (ROE): 3.85%.
• Net Profit Margin: 0.25%.
• Operating Margin: 0.22%.

• Positive Q1 EPS growth (11.56%) and higher Q1 net income signal short-term improvement in profitability per share.
• TTM decline in net income and low margins highlight sensitivity to project cycles, cost pressures, and billing/timing in construction.
• ROE at 3.85% indicates modest returns relative to equity base - investors should weigh capital intensity against growth prospects.
• Margins (net 0.25%, operating 0.22%) suggest limited buffer for margin compression; margin recovery will be key to sustainable earnings growth.

Further context on strategy and long-term objectives can be found here: Mission Statement, Vision, & Core Values (2026) of Zhejiang Construction Investment Group Co.,Ltd.

Zhejiang Construction Investment Group Co.,Ltd (002761.SZ) - Debt vs. Equity Structure

• Total debt: CNY 19.91 billion
• Equity (book value): CNY 10.52 billion
• Debt-to-equity ratio: 1.89

• Leverage: With CNY 19.91bn debt vs. CNY 10.52bn equity (D/E 1.89), the company carries substantial financial leverage, increasing sensitivity to interest and cash-flow stress.
• Liquidity: Current ratio 0.93 and quick ratio 0.84 both below 1.0 signal limited short-term liquidity headroom; the firm may need to rely on asset disposals, refinancing or operational cash generation to meet near-term obligations.
• Interest burden: An interest coverage ratio of 0.31 implies operating income covers only ~31% of interest expense - a clear sign of strained ability to service debt from operating earnings.
• Per-share perspective: Book value per share of CNY 6.27 contrasts with net cash per share of -CNY 9.51, reflecting the net indebtedness on a per-share basis and potential downside if asset valuations deteriorate.

Zhejiang Construction Investment Group Co.,Ltd (002761.SZ) - Liquidity and Solvency

• Cash and cash equivalents: CNY 9.62 billion - provides operational flexibility and a cushion for short-term obligations.
• Working capital: -CNY 6.96 billion - negative position indicating potential liquidity pressure if short-term liabilities must be met without asset disposal or financing.
• Operating cash flow (OCF): CNY 2.70 billion - positive cash generation from operations.
• Free cash flow (FCF): CNY 1.84 billion - indicates remaining cash after capex to service debt, invest, or return to shareholders.
• Altman Z-Score: 0.72 - below critical thresholds, signaling increased bankruptcy risk under the Altman model.
• Piotroski F-Score: 6 - a middling score suggesting moderate financial strength and some improvement/quality in fundamentals.
• Enterprise value (EV): CNY 21.22 billion; EV/EBITDA: 37.49 - market valuation implies a high multiple relative to EBITDA, raising valuation and cash-flow coverage concerns.

Zhejiang Construction Investment Group Co.,Ltd (002761.SZ) - Valuation Analysis

Key valuation metrics for Zhejiang Construction Investment Group Co.,Ltd (002761.SZ) reveal a mixed picture of low market-price multiples against book and sales but high earnings-based valuations, signaling potential asset backing alongside short-term earnings pressure.

• Market capitalization: CNY 9.33 billion
• Trailing twelve months (TTM) EPS: CNY 0.12
• Dividend per share: CNY 0.05; dividend yield: 0.54%

Investor-relevant takeaways:

• Low P/S (0.13) and sub-1 P/B (0.94) point to tangible asset support and potentially undervalued sales/book on a headline basis.
• Extremely high P/E (76.04) and EV/EBITDA (37.49) indicate current earnings and operating cash generation are weak relative to the market price or that the market price embeds future recovery expectations.
• Modest dividend (CNY 0.05; 0.54% yield) reduces income appeal for yield-focused investors.
• Discrepancies between book/sales multiples and earnings/EBITDA multiples warrant deeper examination of recent earnings drivers, one-off items, and cash/debt adjustments in enterprise value.

For further investor context and shareholder composition details, see: Exploring Zhejiang Construction Investment Group Co.,Ltd Investor Profile: Who's Buying and Why?

Zhejiang Construction Investment Group Co.,Ltd (002761.SZ) - Risk Factors

• Altman Z‑Score: 0.72 - well below the distress threshold (typically <1.8), signaling an elevated bankruptcy risk.
• Debt-to-Equity Ratio: 1.89 - substantial leverage that increases financial risk and sensitivity to interest rate changes.
• Working Capital: -CNY 6.96 billion - negative short‑term liquidity position that may constrain operations or require new financing.
• Interest Coverage Ratio: 0.31 - operating income covers only a fraction of interest expense, indicating potential default risk on debt service if operating performance weakens.
• Operating Margin: 0.22% - near break‑even operating performance, leaving little buffer for cost shocks.
• Net Profit Margin: 0.25% - very thin after‑tax profitability, reflecting industry pressure and limited capacity to absorb losses.

• Refinancing risk: With negative working capital and interest coverage <1, near‑term refinancing needs could be urgent and costly.
• Leverage sensitivity: A debt/equity of 1.89 amplifies downside from revenue volatility or margin compression.
• Cash flow vulnerability: Operating margin of 0.22% offers minimal cushion for cyclical downturns or project delays.
• Credit and counterparty risk: Suppliers and financiers may demand tighter terms or higher cost of capital given low Z‑score and coverage.
• Equity dilution risk: Management may need to issue equity or asset sales to shore up the balance sheet, diluting existing shareholders.

Zhejiang Construction Investment Group Co.,Ltd (002761.SZ) - Growth Opportunities

• Stable, long-term revenue from infrastructure assets - notably toll roads - which generate recurring cash flows and can support debt servicing and reinvestment.
• Broad revenue base across housing construction, municipal projects, engineering design, industrial manufacturing, engineering services, and infrastructure investments, reducing reliance on any single cycle.
• Valuation metrics that suggest potential upside: a low P/S ratio and P/B near or below 1 may signal undervaluation relative to book and sales.
• Ongoing shareholder returns via dividends, albeit modest, indicating management willingness to distribute cash.

• Infrastructure exposure: Toll roads and related concessions provide predictable toll revenue, risk-mitigating concession lives, and potential for toll rate adjustments or ancillary commercial development.
• Construction & engineering backlog: Housing and municipal projects contribute near-term revenue visibility and allow cross-selling of engineering and manufacturing capabilities.
• Value and yield angle: P/S of 0.13 and P/B of 0.94, combined with EPS of CNY 0.12, present a case for both value-seeking and turnaround-oriented investors.