# China Railway Construction (601186.SHG)

Canonical: https://gigainvestors.com/s/601186.SHG

Analysis as of: 2026-10-16T07:35:30.613Z. Financial observations: FY2002–FY2025.

Listing currency: CNY. Reporting currency: CNY.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: CNY 6.12 per share; close as of 2026-10-15.

## Checklist

### understandable: pass

- 2 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 2

- Years with a net loss: 0

- Operating margin variation: 0.13×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.03×

- FY2017: 0.03×

- FY2018: 0.03×

- FY2019: 0.03×

- FY2020: 0.03×

- FY2021: 0.03×

- FY2022: 0.03×

- FY2023: 0.03×

- FY2024: 0.03×

- FY2025: 0.05×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 8.5%

- ROIC, second-lowest year: 5.4%

- Typical minus recent gross margin: -0.1 pp

- Typical gross margin (annual median): 9.7%

- Recent gross margin (lower of latest and 3-year median): 9.7%

- Years with nonpositive capital: 0

- Capital spending / revenue: 3.7%

- ROIC including acquisitions, ten-year median: 2.4%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 9.0%

- FY2017: 10.3%

- FY2018: 9.5%

- FY2019: 9.2%

- FY2020: 8.9%

- FY2021: 7.8%

- FY2022: 8.0%

- FY2023: 7.7%

- FY2024: 4.8%

- FY2025: 5.4%

### economics: fail

- owner earnings cash conversion below threshold

- Owner earnings / net income, 5-yr: 0.50×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: CNY 59B

- Net income, five-year total: CNY 118B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: -1.0 pp

- Working capital / revenue, change between three-year averages: -6.4 pp

- Working capital / revenue, final three-year average: 14.3%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 0.64×

- FY2022: 0.78×

- FY2023: 0.57×

- FY2024: 0.33×

- FY2025: 0.02×

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 9.5% vs 5.4%

- Per-share earnings: 1.06 to 1.46 (three-year endpoint medians)

- acquired goodwill and intangibles (proxy) exceeds half of ten-year net income with low and deteriorating ROIC

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 2.5%

- Ordinary dilution, 5-year annual growth: 0.7%

- Market cap gain: CNY -39B

- Cumulative retained earnings: CNY 143B

- Diluted shares, 10-year annual growth: 2.5%

- Diluted shares, 5-year annual growth: 0.7%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 4.1%

- Per-share value change: CNY 0.40

- Per-share value, starting three-year median: CNY 1.06

- Per-share value, ending three-year median: CNY 1.46

- Buybacks concentrated in cheaper years (correlation): 0.50

- Average buyback yield: 10.0%

- Buyback history: 3 years

- Debt-funded buybacks: Yes

- Acquisition spending: CNY 148B

- Cumulative net income, 10 years: CNY 209B

- ROIC, first three-year median: 9.5%

- ROIC, last three-year median: 5.4%

Chart: Earnings per share; fiscal year observations.

- FY2016: CNY 1.06

- FY2017: CNY 1.16

- FY2018: CNY 1.31

- FY2019: CNY 1.23

- FY2020: CNY 1.49

- FY2021: CNY 1.60

- FY2022: CNY 1.76

- FY2023: CNY 1.73

- FY2024: CNY 1.46

- FY2025: CNY 1.18

### accounting: pass

- Sloan accruals: 0.7%

- Receivables to sales index (DSRI): 0.43×

- Restructuring years, last five: 0

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.16×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.50×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -3.0%

- FY2017: -1.1%

- FY2018: 1.4%

- FY2019: -1.8%

- FY2020: -1.4%

- FY2021: 2.4%

- FY2022: -1.9%

- FY2023: 0.3%

- FY2024: 2.9%

- FY2025: 0.7%

## Holders

## Price story

Down 49% since Apr 2023 · sales -3.5%

Story as of 2026-10-16T10:00:05.254Z; price observation 2026-10-15.

### Sales · FY2024–2025

sales -3.5%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: CNY 629B 

- FY2017: CNY 681B 

- FY2018: CNY 730B 

- FY2019: CNY 830B 

- FY2020: CNY 910B 

- FY2021: CNY 1.02T 

- FY2022: CNY 1.10T 

- FY2023: CNY 1.14T 

- FY2024: CNY 1.07T 

- FY2025: CNY 1.03T 

### Gross margin · FY2025

gross margin 9.7%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: 9.2% 

- FY2017: 8.8% 

- FY2018: 9.8% 

- FY2019: 9.6% 

- FY2020: 9.2% 

- FY2021: 9.6% 

- FY2022: 10.0% 

- FY2023: 10.3% 

- FY2024: 10.1% 

- FY2025: 9.7% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in engineering & construction; annual sales are CNY 1 trillion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:30.613Z); FY2025: revenue 1029784460000; grossProfit 100117492000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 601186.SHG: China Railway Construction Corporation Limited, together with its subsidiaries, engages in the construction business in Mainland China and internationally. It operates through five segments: Construction Operations; Planning, Design and Consultancy Operations; Manufacturing operations; Real Estate Development Operations; and Other Business Operations. The Construction Operations segment engages in the construction of infrastructure, such as railways, highways, rail transits, water conservancy and hydropower, housing construction, municipal engineering, bridges, tunnels, airports, and wharves. The Plan, Design and Consultancy Operations segment provides planning, design, and consultancy services for civil engineering and infrastructure construction projects, such as railways, highways, urban rail transport, etc. The Manufacturing Operations segment is involved in the research and development, production, and sale of mechanical equipment comprising railway track maintenance and tunnel boring machinery, as well as manufacturing of track systems, etc. The Real Estate Development Operations segment engages in the development, construction, and sale of residential and commercial properties. The Other Business Operations segment includes trade and logistics, finance and insurance, and highway operation activities. In addition, it is involved in the purchase and sales of goods and materials; and offers project investment and financial services. The company was founded in 1948 and is headquartered in Beijing, the People's Republic of China. China Railway Construction Corporation Limited is a subsidiary of China Railway Construction Corporation Group.

### Why customers stay

Margins ranged from 9.7% to 10.3% during 2023–25; it earns 8.5% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:30.613Z); FY2023: grossProfit / revenue = 10.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:30.613Z); FY2024: grossProfit / revenue = 10.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:30.613Z); FY2025: grossProfit / revenue = 9.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:30.613Z); 10-year return on capital observations [[2016,0.08976245735121996],[2017,0.1029169125108261],[2018,0.09477161612212712],[2019,0.09225181197448615],[2020,0.0893512957129554],[2021,0.07776066276655696],[2022,0.08024344226004797],[2023,0.07709900271379623],[2024,0.04761483425046116],[2025,0.0539804902475421]]; median 0.08479736898650168. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 10% gross margin through 2022 cost inflation.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:30.613Z); Gross margin observations: [[2021,0.09573073289889199],[2022,0.09972022156335779],[2023,0.10256643595585573]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 10 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:30.613Z); FY2017: growth capex 3805401067.32576; upkeep 26425604932.67424; owner earnings 2051368067.32576. Growth capex / owner earnings = 1.855055232621722.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:30.613Z); FY2018: growth capex 3634080211.027088; upkeep 28704907788.97291; owner earnings 3050477211.027088. Growth capex / owner earnings = 1.191315312204382.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:30.613Z); FY2019: growth capex 7421428303.590958; upkeep 24843568696.409042; owner earnings 10937156303.590958. Growth capex / owner earnings = 0.6785519103493388.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:30.613Z); FY2020: growth capex 5921177236.079033; upkeep 25467011763.920967; owner earnings 12190965236.079033. Growth capex / owner earnings = 0.4857020852258172.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:30.613Z); FY2021: growth capex 8196489587.423676; upkeep 24678964412.576324; owner earnings 15739015987.423676. Growth capex / owner earnings = 0.5207752247010304.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:30.613Z); FY2022: growth capex 5682222342.466053; upkeep 24578071657.533947; owner earnings 20886594536.141705. Growth capex / owner earnings = 0.2720511633734097.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:30.613Z); FY2023: growth capex 3110663006.048458; upkeep 31809968993.95154; owner earnings 14960420971.026546. Growth capex / owner earnings = 0.20792616812540218.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:30.613Z); FY2024: growth capex 0; upkeep 37948731000; owner earnings 7344909381.418982. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:30.613Z); FY2025: growth capex 0; upkeep 47600546000; owner earnings 343211442.6081047. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:30.613Z); Dividend observations: [[2016,10336635000],[2017,11771014000],[2018,12649754000],[2019,2851704000],[2020,2851704000],[2021,3123295000],[2022,3340567000],[2023,19524561000],[2024,22322469000],[2025,26759183000]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 61.9% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 601186.SHG SharesStats.PercentInsiders = 61.931999999999995 percentage points; cache date 2026-10-16.

### What the price says

The price is 0.1 times annual sales.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:30.613Z); Closing price 6.12 CNY; reporting-to-trading FX 1; FY2025 annual sales per share 66.17496823150996; price multiple 0.09248209955446404. FY2025 cash earnings/share 0.022055106863121662. Closing-price date 2026-10-15.

## Monthly share-price history (CNY per share)

- 2016-10: CNY 10.30 per share

- 2016-11: CNY 12.58 per share

- 2016-12: CNY 11.96 per share

- 2017-01: CNY 12.29 per share

- 2017-02: CNY 13.25 per share

- 2017-03: CNY 12.99 per share

- 2017-04: CNY 13.04 per share

- 2017-05: CNY 12.06 per share

- 2017-06: CNY 12.03 per share

- 2017-07: CNY 13.07 per share

- 2017-08: CNY 12.46 per share

- 2017-09: CNY 11.86 per share

- 2017-10: CNY 11.97 per share

- 2017-11: CNY 11.74 per share

- 2017-12: CNY 11.14 per share

- 2018-01: CNY 11.75 per share

- 2018-02: CNY 10.52 per share

- 2018-03: CNY 9.79 per share

- 2018-04: CNY 9.91 per share

- 2018-05: CNY 9.17 per share

- 2018-06: CNY 8.62 per share

- 2018-07: CNY 10.24 per share

- 2018-08: CNY 10.60 per share

- 2018-09: CNY 11.15 per share

- 2018-10: CNY 11.00 per share

- 2018-11: CNY 10.99 per share

- 2018-12: CNY 10.87 per share

- 2019-01: CNY 10.09 per share

- 2019-02: CNY 11.40 per share

- 2019-03: CNY 11.51 per share

- 2019-04: CNY 10.80 per share

- 2019-05: CNY 9.40 per share

- 2019-06: CNY 9.95 per share

- 2019-07: CNY 9.71 per share

- 2019-08: CNY 9.10 per share

- 2019-09: CNY 9.46 per share

- 2019-10: CNY 9.38 per share

- 2019-11: CNY 9.67 per share

- 2019-12: CNY 10.14 per share

- 2020-01: CNY 9.42 per share

- 2020-02: CNY 9.50 per share

- 2020-03: CNY 9.83 per share

- 2020-04: CNY 9.78 per share

- 2020-05: CNY 8.65 per share

- 2020-06: CNY 8.38 per share

- 2020-07: CNY 8.79 per share

- 2020-08: CNY 8.93 per share

- 2020-09: CNY 8.29 per share

- 2020-10: CNY 8.33 per share

- 2020-11: CNY 8.59 per share

- 2020-12: CNY 7.90 per share

- 2021-01: CNY 7.73 per share

- 2021-02: CNY 7.83 per share

- 2021-03: CNY 8.01 per share

- 2021-04: CNY 7.72 per share

- 2021-05: CNY 7.64 per share

- 2021-06: CNY 7.43 per share

- 2021-07: CNY 7.35 per share

- 2021-08: CNY 7.63 per share

- 2021-09: CNY 7.90 per share

- 2021-10: CNY 7.44 per share

- 2021-11: CNY 7.30 per share

- 2021-12: CNY 7.80 per share

- 2022-01: CNY 8.06 per share

- 2022-02: CNY 7.98 per share

- 2022-03: CNY 7.66 per share

- 2022-04: CNY 8.42 per share

- 2022-05: CNY 7.94 per share

- 2022-06: CNY 7.90 per share

- 2022-07: CNY 7.36 per share

- 2022-08: CNY 7.43 per share

- 2022-09: CNY 6.97 per share

- 2022-10: CNY 6.87 per share

- 2022-11: CNY 8.11 per share

- 2022-12: CNY 7.73 per share

- 2023-01: CNY 7.91 per share

- 2023-02: CNY 8.11 per share

- 2023-03: CNY 9.01 per share

- 2023-04: CNY 11.90 per share

- 2023-05: CNY 10.39 per share

- 2023-06: CNY 9.85 per share

- 2023-07: CNY 10.75 per share

- 2023-08: CNY 8.80 per share

- 2023-09: CNY 8.73 per share

- 2023-10: CNY 8.02 per share

- 2023-11: CNY 7.59 per share

- 2023-12: CNY 7.61 per share

- 2024-01: CNY 8.60 per share

- 2024-02: CNY 8.68 per share

- 2024-03: CNY 8.57 per share

- 2024-04: CNY 8.48 per share

- 2024-05: CNY 8.63 per share

- 2024-06: CNY 8.57 per share

- 2024-07: CNY 8.35 per share

- 2024-08: CNY 7.86 per share

- 2024-09: CNY 8.91 per share

- 2024-10: CNY 8.93 per share

- 2024-11: CNY 9.25 per share

- 2024-12: CNY 9.17 per share

- 2025-01: CNY 8.54 per share

- 2025-02: CNY 8.41 per share

- 2025-03: CNY 7.92 per share

- 2025-04: CNY 7.81 per share

- 2025-05: CNY 7.91 per share

- 2025-06: CNY 8.01 per share

- 2025-07: CNY 8.06 per share

- 2025-08: CNY 8.13 per share

- 2025-09: CNY 7.85 per share

- 2025-10: CNY 7.95 per share

- 2025-11: CNY 7.73 per share

- 2025-12: CNY 7.67 per share

- 2026-01: CNY 7.27 per share

- 2026-02: CNY 7.36 per share

- 2026-03: CNY 7.05 per share

- 2026-04: CNY 6.75 per share

- 2026-05: CNY 6.40 per share

- 2026-06: CNY 5.95 per share

- 2026-07: CNY 6.41 per share

- 2026-08: CNY 6.07 per share

- 2026-09: CNY 6.02 per share

- 2026-10: CNY 6.13 per share

## Annual estimated value (CNY per share)

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.

## Reported holder observations