China Railway Construction Heavy Industry Corporation Limited: history, ownership, mission, how it works & makes money

A Brief History of China Railway Construction Heavy Industry Corporation Limited

China Railway Construction Heavy Industry Corporation Limited (CRCHI) has established itself as a prominent player in the heavy machinery and equipment sector, particularly in the railway construction domain. The company was founded in 2007 as a subsidiary of China Railway Construction Corporation (CRCC), which is one of the largest construction companies globally. CRCHI specializes in manufacturing and supplying heavy construction machinery, such as tunnel boring machines (TBMs), hydraulic excavators, and various other railway construction equipment.

In its early years, CRCHI focused on enhancing its production capabilities and research and development to meet the increasing demands of the railway sector, particularly as China expanded its high-speed rail network. By 2012, CRCHI had become one of the leading manufacturers of tunnel boring machines, contributing significantly to China’s urban construction and metro systems.

Over the years, CRCHI has made substantial investments in technology and innovation. The company has formed partnerships with international firms to access advanced technologies and expand its product offerings. For instance, in 2016, CRCHI collaborated with Germany’s Herrenknecht AG to enhance its TBM technology, further establishing its competence in the global market.

As of 2022, CRCHI reported revenues of approximately RMB 19.87 billion (around $3.05 billion), signifying a strong growth trajectory. The net profit for the same year was approximately RMB 1.29 billion, reflecting a margin of about 6.5%.

CRCHI has also been expanding its international footprint, with projects across Asia, Africa, and Europe. The company secured contracts in regions such as Africa for various railway and infrastructure projects, leveraging China's Belt and Road Initiative to promote infrastructure development globally.

In terms of stock market performance, as of early 2023, CRCHI's shares are listed on the Shanghai Stock Exchange, trading at approximately RMB 9.50 per share. The company has maintained a price-to-earnings (P/E) ratio of around 13.5, which reflects investor confidence in its operational efficiency and growth prospects.

As CRCHI continues to innovate and expand its capabilities, it remains well-positioned in the heavy machinery sector, particularly as the demand for efficient and advanced construction solutions grows in both domestic and international markets.

A Who Owns China Railway Construction Heavy Industry Corporation Limited

China Railway Construction Heavy Industry Corporation Limited (CRCHI) is predominantly controlled by state-owned enterprises, reflecting its foundational ties to the Chinese government. The company's largest shareholders include China Railway Construction Corporation Limited (CRCC), which owns approximately 61.56% of the total shares. CRCC itself is a major state-owned enterprise primarily engaged in the construction and management of railways, highways, and urban infrastructure.

The shareholding structure is as follows:

As of the latest fiscal reports, CRCHI's financial performance has demonstrated strong growth, with total revenue reaching approximately ¥12.38 billion in 2022, up from ¥10.56 billion in 2021. The company's net profit for 2022 was reported at ¥1.08 billion, reflecting a substantial increase from ¥0.91 billion the previous year.

In terms of stock performance, CRCHI trades on the Shanghai Stock Exchange under the ticker symbol 601186. The stock price as of October 2023 stands at approximately ¥14.60, with a year-to-date increase of 22.15%.

Looking at the broader context, the state ownership within CRCHI aligns with China's strategic initiatives in infrastructure development and the promotion of heavy machinery manufacturing. This integration of state policy and corporate governance underscores the role of CRCHI within national economic plans.

Overall, the ownership structure and performance indicators highlight CRCHI's significance within China's industrial landscape, driven by state ownership and robust financial metrics.

China Railway Construction Heavy Industry Corporation Limited Mission Statement

The mission statement of China Railway Construction Heavy Industry Corporation Limited (CRCHI) emphasizes its commitment to innovation, sustainable development, and quality excellence in the manufacturing of heavy machinery and equipment vital for railway construction. The company aims to enhance infrastructure development, promoting efficiency and enhancing the global competitiveness of China's railways.

CRCHI was established as a subsidiary of China Railway Construction Corporation (CRCC), a significant player in the global construction and engineering industry. As of 2022, CRCHI’s operating revenue was reported at approximately RMB 35.2 billion, illustrating robust growth in the heavy machinery sector.

According to the latest financial data for 2023, CRCHI achieved an operating profit margin of 12.5% and a net income of around RMB 2.6 billion. This financial performance highlights the company's ability to maintain profitability while expanding its market presence.

The company's mission underscores a focus on advancing technology and optimizing production processes. For instance, CRCHI has invested approximately RMB 1.5 billion in research and development in 2023, reflecting its dedication to innovation and improvements in manufacturing capabilities.

Furthermore, CRCHI's global outreach has expanded, contributing significantly to various international infrastructure projects. The firm has secured contracts exceeding RMB 8 billion in overseas markets, underscoring its mission to lead in global infrastructure development.

CRCHI also prioritizes environmental sustainability as part of its core mission. In its latest sustainability report, the company revealed a 20% reduction in carbon emissions in its manufacturing processes over the last five years, aligning with global sustainability goals.

Through its mission statement, CRCHI asserts its commitment to not only economic growth but also social responsibility, enhancing the quality of life in communities where it operates. This dual focus on profitability and sustainability positions the company as a leader in both the domestic and international markets for heavy machinery in railway construction.

How China Railway Construction Heavy Industry Corporation Limited Works

China Railway Construction Heavy Industry Corporation Limited (CRCHI) is a subsidiary of China Railway Construction Corporation Limited (CRCC), primarily engaged in the manufacturing and supply of railway equipment and heavy machinery. As of 2023, CRCHI has established itself as a leader in the rail transport sector, contributing significantly to infrastructure development both domestically and internationally.

In 2022, CRCHI reported revenue of approximately ¥42.18 billion (around $6.5 billion), demonstrating a year-over-year growth of 12.4%. The profit attributed to shareholders was reported at ¥2.4 billion, representing a margin of 5.7%.

Business Segments

CRCHI operates across various segments, including:

• Railway Construction Machinery
• Road Construction Machinery
• Engineering and Technical Services
• Manufacturing of Special Vehicles

Financial Performance

The following table summarizes key financial metrics from CRCHI's 2022 Annual Report:

Manufacturing Capabilities

CRCHI boasts several advanced manufacturing facilities, equipped with cutting-edge technology. In 2023, CRCHI's production capacity included:

• Tunnel Boring Machines: 300 units/year
• Railway Track Machines: 600 units/year
• Heavy Machinery: 1,200 units/year

The company has invested heavily in R&D, with approximately ¥1.2 billion allocated for research initiatives in 2022, focusing on innovation in machinery and construction technology.

International Reach

CRCHI has expanded its footprint beyond China, securing contracts in countries such as:

• Indonesia (High-Speed Rail Project)
• Kenya (Standard Gauge Railway)
• Brazil (Metro Projects)

As of 2023, CRCHI's international projects account for approximately 35% of its total revenue, showcasing the company's strategic global engagement.

Market Context

The rail construction and heavy machinery sector is poised for growth, driven by increasing investments in infrastructure. The estimated market growth rate for railway construction machinery in the Asia-Pacific region is projected at 7.2% CAGR from 2023 to 2028.

Recent Developments

CRCHI has recently launched several new products, including the CRH460 electric locomotive, which boasts a maximum speed of 460 km/h. This innovation positions CRCHI as a competitive player in the advanced railway technology sector.

Additionally, CRCHI has made significant strides in sustainability. The company aims to reduce carbon emissions by 30% by 2025, aligning with China's broader environmental goals.

How China Railway Construction Heavy Industry Corporation Limited Makes Money

China Railway Construction Heavy Industry Corporation Limited (CRCHI), a subsidiary of China Railway Construction Corporation (CRCC), primarily generates revenue through various segments within the construction machinery and equipment sector. The company is recognized for its expertise in manufacturing tunnel boring machines, rail transit products, and other engineering machinery.

In 2021, CRCHI reported revenues of approximately RMB 30.67 billion (around USD 4.7 billion), showcasing a year-on-year growth rate of 9.3%. This growth can be attributed to increased investments in infrastructure projects both domestically and internationally.

CRCHI’s revenue composition is diversified across several product lines:

• Tunnel Boring Machines: Represent 30% of total revenue.
• Rail Transit Products: Contribute about 25%.
• Construction Equipment: Accounts for 20%.
• Engineering Services: Makes up 15%.
• Others: Includes spare parts and maintenance services at 10%.

In terms of geographical revenue distribution in 2021, CRCHI derived approximately 65% of its revenue from domestic sales within China, while the remaining 35% came from international markets, including projects in Asia, Africa, and Europe. This international expansion has been supported by government initiatives under the Belt and Road Initiative (BRI).

CRCHI's profitability can be highlighted through its gross profit margin, which stood at 25.6% in 2021. The net profit for the same year reached around RMB 3.2 billion (approximately USD 500 million), marking an increase of 10.5% from the previous year.

The company invests significantly in research and development (R&D), allocating about RMB 1.2 billion in 2021, which is approximately 4% of its total revenue. This focus on innovation helps maintain competitive advantages and meet increasing demands for advanced construction technology.

Furthermore, CRCHI's operating expenses were recorded at RMB 26.48 billion in 2021, leading to an operating profit of approximately RMB 4.19 billion. The company’s operating profit margin was around 13.6%.

In summary, CRCHI's revenue generation primarily stems from a diverse product portfolio, strategic geographical expansion, and a strong emphasis on R&D. The company’s ongoing projects, bolstered by governmental support and infrastructure investment, position it favorably for continued growth in the engineering machinery sector.