Company Update

What's new

Jinggong Steel Building announced its new orders in 4Q25: Total new orders rose 10.5% YoY to Rmb24.27bn, with new orders from the domestic business down 10.0% YoY to Rmb17.01bn. New orders from overseas business grew 140.1% YoY to Rmb7.2bn, accounting for 29.7% of total new orders and up 16ppt YoY. In 4Q25, overseas new orders soared 568.4% YoY to Rmb2.2bn.

Comments

Overseas new order growth exceeded expectations, further demonstrating the sustainability of the firm’s international expansion: Since 2024, the firm’s overseas business has grown rapidly, with its share of new orders steadily increasing.

New orders for industrial buildings and public buildings rose 41.5% and 302.5% YoY to Rmb2.64bn and Rmb4.56bn in 2025. We expect the firm to benefit from increased investment in emerging markets such as the Middle East and Southeast Asia, leveraging the brand recognition and experience gained from its early overseas expansion. Meanwhile, domestic manufacturing clients are accelerating investment and building factories overseas, which we believe may also generate stable demand for the firm's overseas business.

We believe overseas expansion will remain a key trend for construction firms in 2026. We expect concentrated conversion of overseas orders and accelerated earnings growth in the next 1–2 years.

Accelerated transformation of domestic business; project quality to improve. In 2025, the firm proactively adjusted its domestic order mix, gradually reducing bids for governmentfunded projects and shifting toward heavy steel projects and “quality housing” projects funded by private enterprises. Meanwhile, the firm is transforming its business structure, with new orders from industrial chain and strategic franchise business and building-integrated photovoltaics (BIPV) business rising 51.7% and 60.8% YoY to Rmb1.28bn and Rmb350mn in 2025.

Financials and valuation

We largely maintain our earnings forecasts. We estimate 2025 and 2026 attributable net profit at Rmb659mn and Rmb790mn, and introduce our 2027 earnings forecast at Rmb896mn. The stock is trading at 10.7x 2026e and 9.4x 2027e P/E. Based on the firm’s plan to maintain an annual cash dividend payout ratio of at least 70% for 2025–2027, the current share price implies dividend yields of 6.6% and 7.4% for 2026 and 2027. We maintain an OUTPERFORM rating and target price of Rmb5.22, implying 13.2x 2026e and 11.6x 2027e P/E with 23.1% upside.

Risks

Project payment collection and/or execution of backlog orders disappoint; exchange rate fluctuations.