China Railway Engineering Corporation (CREC) recently released its annual report for 2024 and the first-quarter financial report for 2025. The data indicates that this large state-owned enterprise has experienced a significant decline in overall performance, with both revenue and profits decreasing. The traditional construction business is facing significant pressure due to the continued challenging market environment.
The annual report reveals that in 2024, China Railway Engineering Corporation achieved total operating income of approximately 1.16 trillion yuan, a year-on-year decrease of 8.17%. The net profit attributable to shareholders of listed companies was around 27.8 billion yuan, a 16.71% decrease year-on-year. Furthermore, the non-net profit dropped significantly by 21.21% year-on-year. Additionally, the company signed new contracts worth about 2.7151 trillion yuan for the year, a 12.4% decrease compared to the previous year, reflecting a weakening overall demand in the infrastructure construction market and facing obstacles in business expansion.
Looking at the business segments, the performance of the traditional construction sector was weak, becoming one of the main reasons for the company’s declining performance. New contracts in railway operations were around 319.4 billion yuan, a slight increase of 0.3% year-on-year. Road operations saw a 24.3% decrease in new contracts at about 167.3 billion yuan. Municipal operations had new contracts worth around 193.6 billion yuan, a 25.9% decrease, and urban rail operations saw a significant 55.8% drop in new contracts at only 72.7 billion yuan. Additionally, building construction new contracts were approximately 921.1 billion yuan, representing a 19.7% decrease. These figures indicate a narrowing growth space in traditional infrastructure projects, with continuous competitive market pressure and difficulties in fund recovery.
Meanwhile, China Railway Engineering Corporation released its first-quarter 2025 report on April 29. During the reporting period, the company’s operating income was around 248.5 billion yuan, a 6.21% decrease year-on-year. The net profit attributable to shareholders of listed companies was about 6 billion yuan, a 19.46% decrease year-on-year. The net cash flow generated from operating activities was approximately -77.3 billion yuan, indicating the company’s short-term liquidity pressure.
The new contract amount for the first quarter of 2025 was 560.1 billion yuan, a 9.9% decrease year-on-year, continuing the downward trend from 2024. Industry analysts point out that, influenced by factors such as macroeconomic adjustments, a downturn in the real estate market, and limited financing capabilities of local governments, China Railway Engineering Corporation, as a leading traditional infrastructure enterprise, urgently needs breakthroughs in expanding into emerging businesses, controlling costs, and managing funds to alleviate the current weak growth situation.
According to public information, China Railway Engineering Corporation (CREC) is China’s largest railway and bridge construction contractor, with China Railway Construction Corporation as its controlling shareholder. It is a super-large state-owned enterprise group supervised by the State-owned Assets Supervision and Administration Commission of the State Council. China Railway Engineering Corporation holds a leading position in the construction industry on the mainland and is responsible for large-scale infrastructure projects overseas, primarily in Southeast Asia and African countries.
A recent incident involving the collapse of an office building constructed by a subsidiary of China Railway Engineering Corporation in Thailand has sparked significant controversy. On March 28, a magnitude 8.2 earthquake struck Myanmar, over 1000 kilometers away from the epicenter, causing the audit office building in Bangkok, Thailand, constructed by China Railway Engineering Corporation, to collapse instantly, resulting in 44 deaths and 50 missing persons.
Thai Minister of Industry, Akanat Promphan, previously led a team to the site to collect debris samples and told Reuters that he was concerned that the building had used inferior quality steel.
(Extended reading:
Bangkok building collapse Analysis: China’s export of substandard projects)