| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 21.27 | 119 |
| Intrinsic value (DCF) | 4.56 | -53 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 1.36 | -86 |
Sichuan Road & Bridge Co., Ltd. is a leading Chinese infrastructure development company specializing in the design, investment, construction, and operation of major civil engineering projects across global markets. Headquartered in Chengdu, China, the company has established a formidable presence in highway, bridge, tunnel, railway, municipal, and port construction projects throughout China, Africa, the Middle East, Southeast Asia, Europe, and Oceania. Beyond its core engineering and construction expertise, Sichuan Road & Bridge has diversified into clean energy through hydro and wind power generation, mining operations for gold, graphite, iron, and nepheline, as well as land consolidation and financial services. As a subsidiary of Sichuan Railway Investment Group Co., Ltd., the company leverages strong government relationships and extensive project experience to secure large-scale infrastructure contracts. This vertically integrated approach positions Sichuan Road & Bridge as a comprehensive infrastructure solutions provider in the rapidly growing global construction sector, particularly benefiting from China's Belt and Road Initiative and domestic infrastructure development programs.
Sichuan Road & Bridge presents a mixed investment profile with several attractive fundamentals offset by significant risks. The company demonstrates solid profitability with CNY 7.2 billion net income on CNY 107.2 billion revenue, representing a healthy 6.7% net margin for the capital-intensive construction industry. With a market capitalization of CNY 74.4 billion and a beta of 0.354, the stock offers relative stability compared to broader market volatility. However, investors should note concerning cash flow dynamics with operating cash flow of CNY 3.4 billion significantly overshadowed by capital expenditures of CNY -7.6 billion, indicating substantial ongoing investment requirements. The company's total debt of CNY 57.3 billion against cash reserves of CNY 20.8 billion suggests moderate leverage, while the dividend yield provides income appeal. The primary investment thesis hinges on continued infrastructure spending in China and international markets, though geopolitical risks in overseas operations and cyclical construction demand patterns warrant careful monitoring.
Sichuan Road & Bridge competes in the highly fragmented but strategically important infrastructure construction sector, where its competitive advantages stem from several key factors. The company's subsidiary relationship with Sichuan Railway Investment Group provides privileged access to government contracts and infrastructure projects throughout Sichuan province and beyond, creating a stable revenue base. Its diversified project portfolio spanning transportation infrastructure, energy projects, and mining operations differentiates it from pure-play construction firms and provides multiple revenue streams. The company's international presence across Africa, Middle East, Southeast Asia, Europe, and Oceania demonstrates proven capability in executing complex projects in diverse environments, though this also exposes it to geopolitical and currency risks. Technically, the company has developed expertise in challenging engineering projects including bridges, tunnels, and railways in difficult terrain. However, competition remains intense from both state-owned enterprises and private contractors, with pricing pressure often affecting margins. The company's scale and project experience provide bidding advantages for large infrastructure tenders, but its international expansion requires careful risk management given the capital-intensive nature of cross-border construction projects. The diversification into mining and energy represents both a strategic hedge and operational complexity that competitors may not face.