We reiterate "Buy" rating and maintain the TP of HK$15.00. We forecast China State Construction International’s (CSCI, the "Company") EPS for 2023-2025 to be HK$1.814/ HK$2.100/ HK$2.339, with YoY increase of 14.8%/ 15.7%/ 11.4%, respectively, corresponding to an EPS CAGR for 2022-2025 of 14.0%. We maintain the TP at HK$15.00, equivalent to 7.3x/ 6.6x/ 6.2x 2023/ 2024/ 2025 EV/EBITDA.
　　1Q-3Q2023 newly signed contracts were HK$140.4 billion, up 11.7% YoY. 1) 1Q-3Q2023 revenue was HK$79.49 billion (+8.3%), operating profit (including share of profits of JVs) was HK$11.56 billion (+17.6%). 2) Revenue of technology driven business was HK$17.27 billion (-32.6%), construction investment driven construction was HK$37.47 billion (+40.8%), traditional construction was HK$23.82 billion (+18.9%) and operation was HK$ 0.92 billion (-19.3%). The substantial drop in revenue for technology driven business was mainly due to the completion of anti-epidemic projects for 1Q-3Q2022 while such projects no longer exist in 1Q-3Q2023, excluding that effect, technology driven business revenue actually increased 10.4% YoY. 3) In 1Q-3Q2023, the Company received HK$140.4 billion of new contracts (+11.7%), while as at 30 September, 2023, the Company had a backlog of HK$344.03 billion (+15.0%).
　　MiC will play an important role in urban village renovation. Huapichang Project, one of the first pilot projects in Beijing and the first in Xicheng District to renovate old communities using the “demolishing and constructing at the same site” model, has a strong need to shorten the construction period due to the residents’ responsibility to share the cost of renovation and burden rents during the construction period and related moving expenses. With the help of the Company’s concrete MiC technology, the construction period is substantially shortened to only half a year. We expect such technology will play an increasingly important role in urban village renovation projects, especially in tier-1 cities where rents, moving expenses and waste treatment costs are critical concerns.
　　Catalysts: 1) The Company won the first large-scale infrastructure project in Northern Metropolis, the Yuen Long Barrage Scheme, marking a significant progress in project wins for the Northern Metropolis Development Strategy; 2) the Company won the bid of the largest EPC public housing project in Macau to date.
　　Risk: Government infrastructure spending may be lower than expected.