CRCC HighTech Equipment (1786.HK) Q2 2025 Earnings Report

CRCC HighTech Equipment delivered a robust year-over-year uplift in QQ2 2025, recording revenue of 1,731,934,818 CNY, up from the prior-year quarter. Gross profit reached 279,197,618 CNY, yielding a gross margin of 16.12%, while EBITDA stood at 116,850,090 CNY and net income at 66,721,188 CNY (net margin 3.85%). The company generated an operating income of 68,059,388 CNY, reflecting a 3.93% operating margin, and an EBITDAR of 6.75%. The quarterly EPS was 0.0438 CNY on a diluted basis. Key drivers include a strong rebound in demand for large-scale railway track maintenance machinery and related services, coupled with a business model characterized by very low leverage (debt ratio 0.18%, debt/equity 0.271%). The balance sheet signals liquidity resilience (current ratio 2.32, quick ratio 1.343) with substantial cash per share (0.967 CNY). However, cash flow dynamics show headwinds: operating cash flow per share is negative (-0.179 CNY) and free cash flow per share is negative (-0.183 CNY), underscoring working capital requirements and timing of project-related cash receipts and expenditures. The company’s leverage headroom, conservative capital structure, and favorable valuation metrics (P/E ~4.31x, P/B ~0.19x, P/S ~0.66x) position it attractively for investors who can tolerate near-term cash conversion cycles tied to project execution. Absent explicit management guidance in available data, the outlook remains contingent on sustained rail capex and project timing through 2H 2025, with upside potential if order intake accelerates and working capital normalizes.