Resounding A-Share Excellent Companies Series | North International: Deepening Belt and Road Engagement, Steadily Growing Through Project Investment, Construction, and Operations

Editor’s Note: In response to the Central Economic Work Conference’s call to “resound the optimistic narrative on China’s economy,” Valuation Home has carefully launched the “Resounding A-Share Excellent Companies Series.” This article is the 52nd in the series. As the world’s largest manufacturing nation and a major consumer market, China has nurtured successive waves of “high-quality development” enterprises amid its rapid economic growth since reform and opening-up. Outstanding A-share companies exhibit stable earnings growth, steady operating cash flows, robust and consistent profitability (ROE), stable shareholder dividend returns, and proactive management teams. However, we must emphasize that the companies featured in this series are selected independently of their stock price performance. Stock price movements are highly sensitive to macroeconomic variables, industry expectations, market risk appetite, and other uncertain factors. Therefore, this series does not constitute any investment advice. Investing in stocks involves risks—invest with caution. Today, Valuation Home presents North International—a leading enterprise in international engineering and energy infrastructure construction. North International Cooperation Co., Ltd. (hereinafter referred to as “North International” or the “Company”) was established in 1986, with its headquarters located at No. 6 Zhengda Road, Shijingshan District, Beijing—the North International Building. The Company was listed on the Shenzhen Stock Exchange in June 1998, with stock code 000065. As of the end of 2025, its controlling shareholder is China North Industries Corporation, holding 47.97% of shares; its ultimate controlling entity is the State-owned Assets Supervision and Administration Commission of the State Council, collectively holding 52.15%. North International’s core businesses include engineering construction and services, resource supply chain operations, power generation operations, and industrial manufacturing. According to North International’s 2025 Annual Report, revenue by business segment is as follows: Engineering construction and services—RMB 6.32 billion (46.63% of total revenue); Resource and equipment supply chain—RMB 5.44 billion (40.17%); Industrial manufacturing—RMB 1.23 billion (9.10%); Power generation operations—RMB 503 million (3.71%); Other businesses—RMB 53 million (0.39%). By geography, overseas sales accounted for 63.39% of total revenue, while domestic sales accounted for 36.61%, indicating that the majority of the Company’s operations are conducted overseas. I. Industry Outlook: Opportunities and Risks Coexist; Long-Term Growth Potential Remains Strong; Diversified Business Portfolio Enhances Resilience and Predictability North International’s core businesses primarily operate within two sectors: international engineering and coking coal supply chain. Current conditions in these sectors are as follows: International Engineering Sector: Global infrastructure demand remains high, with vast potential and broad scope for cooperation. Many countries have introduced economic stimulus plans centered on infrastructure investment. Industrialization and urbanization are accelerating across developing countries, especially in Asia, Africa, the Middle East, and Central & Eastern Europe. According to McKinsey’s latest forecast, global infrastructure investment will reach USD 106 trillion by 2040. The global energy transition toward green sources is gaining strong momentum. The International Energy Agency forecasts that global renewable energy installed capacity will increase by 4,600 GW by 2030. New energy capacity in Belt and Road countries is expanding rapidly, generating broad demand for “new-energy infrastructure + grid upgrades + energy storage solutions.”

Conclusion: Technical indicators signal short-term strength; capital inflows are driving a trend reversal, with the next resistance level near RMB 14 (the prior high-density zone). III. Capital Flow Analysis: Synchronized Inflows from Domestic and Foreign Investors; Institutional Allocation Increasing • Northbound Funds: Net purchases totaled RMB 120 million since October (0.8% of free-float shares); on October 24 alone, net inflows reached RMB 45 million (cumulative additions over the past month exceeded RMB 150 million). • Institutional Holdings: Q3 2025 fund holdings rose to 11.5% from 8.2% in Q2 (e.g., ChinaAMC Infrastructure ETF and Bank of Communications Manufacturing Fund newly entered the Top 10 Shareholders list); the National Social Security Fund has increased its stake for three consecutive quarters, currently holding 3.1%. • Margin Trading: Margin financing balance stands at RMB 380 million (up 15% MoM); short-selling balance is merely RMB 2 million (indicating extremely weak bearish sentiment). Conclusion: Synchronized inflows from domestic and foreign investors, coupled with strong institutional allocation intent, provide near-term upward momentum for the stock price. IV. Market Sentiment: Policy Catalysts and Thematic Heat Drive Rising Sentiment—Yet Still Within Rational Bounds • News & Events: On October 23, the State Council released the “High-Quality Development Action Plan for the Belt and Road Initiative (2025–2030),” explicitly pledging “enhanced credit support for international engineering contracting.” As a centrally owned (“Zhongzi-tou”) international engineering contractor, North International has drawn heightened market attention. • Trading Activity: Turnover rate reached 7.2% on that day (vs. 5% monthly average); discussion volume on stock forums rose 80% MoM (keywords such as “orders” and “FX benefit” appeared frequently), yet no “wave of consecutive limit-ups” or extreme speculative commentary emerged. • Valuation Expectations: Consensus forecasts project 2025 net profit at RMB 1.3 billion (implying a P/E ratio of 10.5x), below the construction & decoration sector’s average P/E of 13x. Market sentiment centers on “value recovery,” not bubble-driven speculation. Conclusion: Sentiment is warming under policy tailwinds but remains rational—not yet reaching the “greed” stage. V. Macroeconomic Environment: Dual Tailwinds from Policy Support and External Conditions • Domestic Policy: Under the pro-stability growth framework, infrastructure investment rose 9% YoY in Q3 (annual target: 10%). As a key Belt and Road initiative contractor, the Company benefits from preferential policies including dedicated loans and export credit insurance. • External Environment: The U.S. Federal Reserve is widely expected to pause rate hikes in November; the U.S. Dollar Index has declined (from 103 to 100), and emerging-market currencies have stabilized—reducing foreign-exchange risk for overseas project collections. • Industry Dynamics: Surging global demand for new-energy infrastructure (e.g., solar projects in the Middle East, wind farms in Southeast Asia) has lifted the share of North International’s new-energy EPC orders to 35% (up from just 15% in 2023), strengthening its exposure to high-beta growth segments. Conclusion: A favorable macro backdrop—bolstered by supportive policies and improved external liquidity—provides the Company with ideal “timing.” VI. Quantitative Analysis: Multi-Factor Convergence Highlights Attractive Value • Value Factor: Trailing-twelve-month P/E = 11x (sector average: 13x); P/B = 1.1x (20th percentile vs. historical levels); dividend yield = 2.5% (stable dividends over past three years)—valuation sits in the undervalued range. • Growth Factor: Net profit up 35% YoY (sector average: 18%); order backlog growth up 45% YoY (sector average: 25%)—growth significantly outpaces peers. • Quality Factor: ROE = 14.5% (sector average: 11%); operating cash flow / net profit = 1.2 (indicating high earnings quality).

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