China State Construction's new contract value exceeds FY12 target

Contracts for the first ten months reached HKD36.56b.

According to Maybank Kim Eng, China State Construction announced after market closed on Friday that the new contract value awarded for the first ten months amounted to HKD36.56 billion.

Here's more from Maybank Kim Eng:

This represents a YoY growth of 27.48% and exceeded the FY12 target of HKD35 billion. This also implies a new contract value awarded amount of HKD2.89 billion alone for October.

As on 31 October 2012, the on-hand contract value amounted to approximately HKD98.36 billion, among which the backlog was approximately HKD62.87 billion, representing a YoY growth of 22.99%, which meets the Group’s works in next three years.

The major new contract awarded in October included an affordable housing project in Dalian, with an attributable contract value of HKD2.5 billion.

Implication: A good but well expected set of operational data. With target contract win amount exceeded target, we may see a slow-down in new contract win for the rest of the year. Nevertheless, we are confident on our FY12 and FY13 projections (EPS growth of 36% and 25%, respectively) with the strong growth in backlog amount.