One of CSCEC’s better known works under construction.
China’s largest construction conglomerate, China State Construction Engineering (CSCEC), saw its profits rise by 34.4 percent during the first half of 2014, compared to the same period last year. While still a small percentage of its business, the company’s strongest growth seems to be coming from its overseas operations.
The Beijing-based government behemoth took home RMB 11.8 billion in profits during the period from January to June and said in a statement to the Shanghai Stock Exchange that it was optimistic that urbanisation would continue to support the construction and real estate markets in China.
In addition to its many construction and infrastructure projects in China, CSCEC owns Hong Kong-listed developer China Overseas Land & Investment, and its Hong Kong-listed subsidiary China State Construction International last year bought a development site in New Jersey, as well as acquiring New York builder Plaza Construction in December.
Real Estate Sales Fall But Construction Up
Even for a mammoth state-owned enterprise such as CSCEC, which enjoys superior access to capital and the benefits of scale, 2014 has been a tough year for real estate sales. Property sales fell 13.5 percent to 68.2 billion yuan, and the total area of projects sold fell 21 percent to 5.27 million square metres.
Revenue from new construction projects rose 9.8 percent to RMB 720 billion, thanks to a 15.6 percent increase in its housing construction business which rose to RMB 632.3 billion during the period.
The company’s infrastructure business slid by 20.8 percent to RMB 82.8 billion.
New Growth From Overseas Operations
In addition to CSCEC’s overseas acquisitions, it seems to be increasingly successfully in winning project work outside of China. The company’s new contracts for overseas deals rose 88.6 percent compared to last year, reaching RMB 42.3 billion during the first six months of 2014. Revenues from overseas were up 23.4 percent to RMB 20.5 billion, and made up 5.5 percent of the company’s total revenues.
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