Tianjin Construction Development Group (2515) H2 2025 earnings summary

Executive summary

• FY2025 revenue fell 19.2% YoY to RMB244.4m; gross profit dropped to RMB17.7m and the year ended with a net loss of RMB48.5m versus net profit of RMB21.8m in FY2024.

• Building construction growth was outweighed by declines in municipal, foundation and petrochemical work; management cited slower tendering, industry slowdown and intensified competition.

Financial highlights

• Revenue was RMB244.4m, down 19.2% YoY; cost of sales was RMB226.7m, down 0.2%.

• Gross profit declined 76.5% YoY to RMB17.7m; gross margin contracted to 7.2% from 24.9%.

• Operating and administrative expenses decreased 10.9% to RMB34.3m, while impairment losses rose 86.3% to RMB27.2m, mainly on aged contract assets.

• Operating loss was RMB44.5m; loss before tax was RMB45.3m and net loss was RMB48.5m, compared with FY2024 net profit of RMB21.8m.

• Finance costs fell to RMB0.7m from RMB1.6m; income tax expense increased to RMB3.3m from RMB2.2m, mainly due to reversal of deferred tax assets.

Outlook and guidance

• Management expects opportunities from urban renewal, affordable housing, flood management, urban safety projects and green smart cities; it aims to use its Tianjin reputation and experience to grow market share.

• Priorities include prudent operations, R&D, deployment of the Jiexiao System and tighter project cost control amid a slower tendering environment.

• A new company is planned using placement proceeds to develop a digital construction machinery leasing platform using in-house AI, Internet technology and standardized electronic processes.

• Remaining performance obligations were RMB199.9m at year-end and are expected to be recognized as work is completed, expected over the next 12 months.