Breaking Down Anhui Construction Engineering Group Co., Ltd. Financial Health: Key Insights for Investors

Peeling back the layers of Anhui Construction Engineering Group Co., Ltd. (600502.SS) reveals a company of contrasts: Q3 2025 revenue plunged to 14.84 billion CNY (down 27.61% year-over-year) while trailing twelve-month revenue through Sept 30, 2025 rose to 87.56 billion CNY (up 2.68% YoY), and 2024 annual revenue reached 96.50 billion CNY (a 5.76% increase); investors must weigh a market capitalization of 8.02 billion CNY (stock 4.66 CNY as of Dec 22, 2025) and attractive valuation metrics-trailing P/E 6.12, forward P/E 4.42, P/B 0.74 and a 5.78% dividend yield-against signs of stress such as a high debt-to-equity ratio of 251.10, negative levered free cash flow of -4.91 billion CNY, shrinking net income (2024 net income 1.34 billion CNY, EPS 0.78 CNY), modest profitability (2024 profit margin 1.4%, operating margin 6.56% as of Mar 31, 2025), solid liquidity with cash on hand of 15.80 billion CNY and cash per share of 9.14 CNY, and growth catalysts including awarded EPC and resettlement projects totaling ~3.593 billion CNY and a 2% stake increase by the controlling shareholder in Sept 2025-read on to parse how these figures translate into risk, resilience and potential upside for investors.

Anhui Construction Engineering Group Co., Ltd. (600502.SS) - Revenue Analysis

Anhui Construction Engineering Group Co., Ltd. (600502.SS) reported mixed top-line signals through 2024-2025: a sharp quarterly decline in Q3 2025 contrasted with modest full-year and TTM growth. Key headline figures to anchor the revenue profile are presented below.

• Q3 2025 revenue: 14.84 billion CNY (down 27.61% year-over-year vs. Q3 2024).
• TTM revenue as of 30 Sep 2025: 87.56 billion CNY (up 2.68% YoY).
• Full-year 2024 revenue: 96.50 billion CNY (up 5.76% YoY vs. 2023).
• Revenue per employee: ~4.92 million CNY (total employees: 17,797).
• Market capitalization: 8.34 billion CNY; stock price: 4.83 CNY (as of 8 Dec 2025).
• Price-to-sales (P/S) ratio: 0.10 - indicating a low market valuation relative to sales.

Implications for investors include the pronounced near-term softness in Q3 2025 against an otherwise stable-to-slightly-growing TTM and 2024 base, and a low P/S that may signal market skepticism or an attractively priced sales base depending on margin and balance-sheet dynamics. For additional context on shareholder composition and investor interest, see: Exploring Anhui Construction Engineering Group Co., Ltd. Investor Profile: Who's Buying and Why?

Anhui Construction Engineering Group Co., Ltd. (600502.SS) - Profitability Metrics

• Net income (2024): 1.34 billion CNY (down 13% vs 2023)
• Profit margin (2024): 1.4% (2023: 1.7%) - decline driven primarily by increased expenses
• Operating margin (as of 31-Mar-2025): 6.56%
• ROA (TTM): 1.60%
• ROE (TTM): 7.81%
• EPS (2024): 0.78 CNY (2023: 0.91 CNY)
• Trailing P/E: 6.12; Forward P/E: 4.42 - signaling potential market undervaluation

• Margin compression in 2024 primarily reflects higher cost of operations and expense increases rather than a collapse in revenue.
• ROE near 8% with a low ROA indicates moderate leverage and asset base efficiency considerations for investors.
• Low P/E multiples relative to peers suggest the market may be pricing in continued margin pressure or offering a value entry for yield-seeking investors.

Anhui Construction Engineering Group Co., Ltd. (600502.SS) - Debt vs. Equity Structure

• Total debt to equity ratio: 251.10 (as of 2025-03-31), indicating very high leverage relative to shareholders' equity.
• Current ratio: 1.04 (as of 2025-03-31), suggesting adequate but limited short-term liquidity coverage.
• Book value per share: 6.49 CNY (as of 2025-03-31).

• March 2025 approval: subsidiaries authorized to issue ultra-short-term financing notes and medium-term notes totaling 3.5 billion CNY-provides near- to medium-term funding capacity while concentrating leverage within the group.
• Two-year validity for the instruments creates a defined refinancing horizon and potential liquidity/timing risk if market conditions deteriorate near maturity.
• Underwriting by several banks spreads execution risk and suggests institutional support, but does not eliminate balance-sheet leverage or covenant/default risk tied to high debt-to-equity levels.
• Current ratio ~1.04 implies working capital is roughly balanced, so cash-flow management and rolling short-term instruments will be critical given the high overall leverage.

Anhui Construction Engineering Group Co., Ltd. (600502.SS) - Liquidity and Solvency

• Total cash (Mar 31, 2025): 15.80 billion CNY - cash per share: 9.14 CNY.
• Operating cash flow (TTM): 1.78 billion CNY.
• Levered free cash flow (TTM): -4.91 billion CNY (negative after debt servicing).
• Current ratio: 1.04 - thin coverage of short-term liabilities by short-term assets.
• Quick ratio: not specified but likely similar to the current ratio (inventory not expected to be a large swing factor).
• Net income (TTM ending Sep 30, 2025): 1.19 billion CNY.

• Strengths: large cash buffer (15.80 bn CNY) provides immediate liquidity and supports operations or near-term obligations.
• Weaknesses: negative levered FCF (-4.91 bn CNY) signals that after debt payments, core cash generation is insufficient and may require financing or asset sales to sustain capex/debt servicing.
• Neutral point: modest operating cash flow (1.78 bn CNY) and positive net income (1.19 bn CNY) indicate profitability but limited free-cash conversion.
• Risk considerations: current ratio of 1.04 leaves little margin for short-term shocks; reliance on cash reserves could erode if negative levered FCF persists.

Anhui Construction Engineering Group Co., Ltd. (600502.SS) - Valuation Analysis

• Trailing P/E: 6.12 - low absolute P/E, implying historically modest price paid for reported earnings.
• Forward P/E: 4.42 - market-implied earnings growth or conservative share price relative to upcoming earnings estimates.
• P/B: 0.74 - stock trading below book value, indicating market values equity less than net asset carrying value.
• EV/Revenue: 0.77 - enterprise value is less than one times revenue, signaling low top-line valuation.
• EV/EBITDA: 14.77 - higher than EV/Revenue implies relatively tighter valuation on operating cash profitability.
• Dividend yield: 5.78% with ex-dividend date 2025-06-30 - attractive current income component for shareholders.
• Share price: 4.66 CNY; 52-week range: 4.31-5.39 CNY.
• Market capitalization: 8.02 billion CNY (as of 2025-12-22).

• Low trailing and forward P/E ratios reflect either depressed share price relative to earnings or near-term earnings strength; reconcile with quality of earnings and cyclical dynamics in construction.
• P/B below 1.0 can indicate balance-sheet support for downside or asset impairments/low ROE justifying discount.
• EV/Revenue <1.0 shows market values the entire firm below one year's revenue, useful for top-line comparisons across peers.
• EV/EBITDA at 14.77 signals investors are valuing operating cash profits more conservatively than simple price multiples suggest; check EBITDA margins and capex needs.
• Dividend yield of 5.78% increases total shareholder return but confirm sustainability via payout ratio and cash flow.

Anhui Construction Engineering Group Co., Ltd. (600502.SS) - Risk Factors

• High financial leverage: debt-to-equity ratio at 251.10, signaling heavy reliance on debt financing and elevated solvency risk.
• Shrinking profitability: operating margin declined sharply from 6.56% to 1.40% year-over-year, reducing earnings buffer against adverse shocks.
• Negative levered free cash flow: the company reports negative LFCF, suggesting potential short-term liquidity strain and reduced ability to service debt or fund growth internally.
• Industry pressure: operates in a highly competitive construction sector where tender pricing, input-cost volatility (materials, labor), and project execution risk compress margins.
• Lower market volatility but limited upside: stock beta is 0.42, indicating lower correlation and volatility relative to the broader market-may limit upside in bull markets.
• ESG and reputational risk: ESG risk rating of 50.9 (severe risk) could affect access to capital, investor appetite, and public procurement opportunities.

• Short-term risks: covenant breaches, higher interest expense sensitivity, and cash runway reduction if LFCF remains negative.
• Medium-term risks: margin recovery uncertainty amid fierce bidding and input-cost inflation; potential downgrades from lenders or rating agencies given leverage and ESG concerns.
• Event-driven risks: sizeable project delays, cost overruns, or contract disputes could rapidly impair already-thin operating margins and cash flows.
• Investor considerations: the low beta may reduce portfolio volatility, but high leverage and severe ESG rating increase downside risk-suitable only for investors who accept elevated credit and operational risk.

Anhui Construction Engineering Group Co., Ltd. (600502.SS) - Growth Opportunities

• Large awarded projects: a rural revitalization EPC project worth ¥2.503 billion and two resettlement site projects totaling ¥1.09 billion - meaningful revenue backlog and near-term work execution.
• Controlling shareholder confidence: Anhui Construction Engineering Group Holdings Co., Ltd. increased its stake by 2% in September 2025, signaling alignment with management and long-term prospects.
• Diversified infrastructure footprint: active in water conservancy, hydropower, highway engineering and related civil works - reduces single-sector dependency and opens multiple tender pipelines.

• Backlog impact: the combined ¥3.593 billion of recent contracts should support revenue visibility and cash flow during execution phases.
• Valuation opportunity: a trailing P/E of 6.12 and forward P/E of 4.42 imply the market may be pricing in downside risks; if execution and margins hold, upside is possible.
• Income appeal: a 5.78% dividend yield (ex-date 2025-06-30) enhances total return potential for yield-focused investors while growth projects execute.
• Shareholder alignment: the 2% stake increase by the controlling shareholder reduces governance/exit risk and indicates confidence in strategic direction.